It's referring to the distinction between two meanings of the word in English. Free as in no cost, and free as in freedom. If someone said "have some free beer" you would assume the first use of the term rather than the second (although you might be suspicious that an offer of "free beer" had a catch). It's just a slightly witty way of explaining the difference between the two terms with brevity.

With free software, the freedom to copy software generally does mean the software is available at no cost, but that's not the goal behind the philosophy, nor is there any restriction on selling it or encouraging donations.