Is this true anymore? Let's say that's true and is the argument for freebies. Let's look at what the argument could be against free giveaways.
Does the proliferation of free books encourage readers to undervalue the writer's work? There are groups on Goodreads specifically for free books. They designate books they want to read and wait for them to go free. Do free books teach readers they don't have to pay for an author's work? You can ponder that for yourself.
Do freebies work better for some categories and not others? Do freebies work best for a series rather than standalones? What percentage of sales can you expect from a giveaway?
Everyone has a somewhat different experience but there are some commonalities reported. Books in hot categories do better no matter what. Standalones do less well leading readers to your other work. Having the first book in the series free is a gateway to the other books in the series so the wisdom says. Sales after a giveaway or from a book that is permanently free is about 5%. If you giveaway 100 books you will sell 5 or less. It's true, those were 5 books you might not have sold otherwise. Is it worth it? You can decide that for yourself.
The effects of a giveaway are not long lasting. What used to be a permanent rise, became a bump and now is reported to last days. Just when writers think they know what to do, Amazon changes its algorithm. What is an algorithm? It's a computer program that sees what customers have been browsing. It finds patterns in that behavior and shows customers more of what the computer thinks you might also be interested in. Hence the books that appear on your page that are designated as "Customers also bought..." Alsobots.
The algorithm working for you can be a fire hose of sales. Against you, it's like the faucet being turned off. This is out of your control completely.
Running a freebie, having a book in KDP Select or setting your book to perma-free by pricing it at $0 elsewhere and forcing Amazon to price-match it, is something you should try. Experience is the best teacher.
In February I was able to put my mature young adult book, Bad Apple, on perma-free. As the first book in the series, I believed it would lead to sales of the others. Thousands of books have been given away been February and yesterday, resulting in a couple hundred sales and a couple ridiculous reviews. As an earthquake happened at Amazon, changing categories and disrupting rankings, I was in the process of removing my book from perma-free. Why? I'm glad I had the experience but it wasn't worth it to me.
If someone wants to consume a Big Mac, they pay for it. If someone wants to consume my book, I should be paid for the time, effort and life experience that went into its creation.