[cubefox]

Yeah, I think you are actually right. I must have misremembered it. This source also suggests Mario Sunshine didn't have a "free" rotating camera but a combination of horizontal rotation and zoom: https://strategywiki.org/wiki/Super_Mario_Sunshine/Controls

I guess then the first game I definitely know that had a free camera was The Legend of Zelda: The Wind Waker, which came out a few months after Sunshine. This is also confirmed here: https://strategywiki.org/wiki/The_Legend_of_Zelda:_The_Wind_...

Of course the question is whether there might have been an earlier game which had it. Regarding Ico, apparently it also allows only horizontal rotation (camera "panning" is horizontal movement): https://strategywiki.org/wiki/ICO/Controls