Should the market etc be allowed to stop a stock owner from buying or selling their stocks? What happened to FREE MARKETS?

It was a deliberate attempt to sink a hedge fund notorious for shortselling (a practice that should be stamped out - hedge funds produce nothing and should be outlawed). Probably successful, too - Melvin Capital faces losses that are greater than its value, it cannot redeem the shares it borrowed (and never could, sheer greed caused it to overcommit - it betted against more shares than actually existed). As soon as Elon Musk got involved (himself the victim of shortselling by hedge funds trying to cripple Tesla), it was game over.
Eventually Gamestock share prices will fall to their proper value (atm they're inflated by >2300%) but the hedge funds that shortsold it will be history. And good riddance.