Capitalism and free markets are not synonymous, and you can have the latter without the former (indeed, that was the case for most our history as economic species).
Capitalism is detrimental to free markets because it has inherent positive feedback loops that concentrate capital. Concentration of capital inhibits competition, and a market without competition is by definition not free, regardless of the amount of government regulation in it.
It could be, in principle. The problem with monopolization of capital is fundamentally caused by our overall conceptual take on private property as an abstract concept. Within that framework, you need regulation to keep the market free. But it's not the only framework that is possible; e.g. consider the situation where all capital is commonly owned and held in usufruct by its actual users ("everything is a co-op").
That's because it is. Free-market socialism is a thing, with a spectrum from centralized demsoc to left libertarians to anarchists. "Freed markets" is the term usually used specifically in the latter context:
Usually this dialog line goes the ancap route, I'm pleasantly surprised
I do think you need some mechanism of enforcement though, history has shown that violent people will easily come along to dominate in the way that they see fit
Capitalism is detrimental to free markets because it has inherent positive feedback loops that concentrate capital. Concentration of capital inhibits competition, and a market without competition is by definition not free, regardless of the amount of government regulation in it.