If a free plan attracts users that can be upsold is that free plan not profitable _vs_ paying for advertising?
If such upselling is done via rug pull tactics it damages your reputation vs never having a free plan in the first place.
If a new bank offered you free or discounted banking would you move over your accounts and payments and credit cards? What if that bank has a reputation for upselling via rug pulling?
For users the cost of switching can mean that services that are free or cheap are not worth it if they are expecting a rug pull.