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Whether you realized it or not, this is a good example of "free as in beer".
The original (or, at least oldest famous) phrase was Richard Stallman's "free as in free speech, not free beer."
Software may be free in the sense that it doesn't cost anything (as in "free beer") but it can still have a whole set of restrictions on how you can use it or modify it. For example, it may not allow third party software to be installed; it may require that you view ads to use it; it may insist on tracking your actions; etc.
Software which is free (as in "free speech") doesn't have these restrictions. In fact, it has few restrictions at all. You can use it however you want. You can even change it if you want (especially if it is open source which means you can see the actual code).
This is what Android is selling. The ability to freely add or subtract applications that can interact with the core software (and other applications) without regard to whether or not they are on the approved list. The downside is that a poorly written application (or a combination of applications/events) could turn your phone into an expensive doorstop.
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