Unable to add free user after 7 day free trial

I have another account of a colleague that has expired the 7 day free trial that I would like to act as a free license going forward. I already have another account in my team that has this license type so it should be possible. The system seems to be forcing me to have a paid license for this user now? This is not desirable. I was under the impression you could have unlimited free users?

My own personal account is the admin and falls under the Full license.

How do I make my colleagues account have the free license plan going forward?

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