[xorcist]

Yes, the MPL is free software.

The FSF explicitly says so on https://www.gnu.org/licenses/license-list.html and the Mozilla project developed the license with the intent of it being used in other free software projects. The important difference is in its limited grant on patents.

The reason Debian avoids distributing Firefox is not because of copyright licenses but because Mozilla vigorously protects their trademarks, including "Firefox" and the various logotypes. You are not allowed to distribute them without permission, which Debian largely wants to avoid to have in order to not set a precedent which would impact further distribution of Debian and its derivatives.

Mozilla does this to avoid the risk of third parties offering Firefox with spyware-like modifications. One might ask why Debian itself do not seem to suffer the same problems. It seems like a problem mostly on proprietary software distribution platforms in practice, but it's certainly a possibility.