TBH, I've never been 100% clear on the meaning of "free variation"; I always thought that meant unconditioned, but I feel that I've seen it used in a way which excluded that possibility.

After doing some quick searching, it seems that my initial impression is correct, and that it does count as allophony; that sort of basic thing is probably better to put in the inventory, since there isn't much to it. Save conditioned allophony for the allophony section itself.