First of all, freebitco is a faucet cum gambling site and recently they introduced daily interest feature and now trying to boost the interest feature by recommending users to use freebitco as a wallet. They have a good track record, but still IMO not good enough to be used as a regular wallet because using a gambling site as a wallet wouldn't make much sense to many users. Their transactions are not fee less, be it Xapo or Coinbase or any  other wallet appropriate fee is needed for fast confirmations so I do not see any difference.

Their daily interest rate cannot be compared to HYIP sites because it is sustainable. So I think users who are already using this feature might use freebitco as a wallet, but I doubt others would opt for it.

Right now with the ever increasing bitcoin price, the best practice is to avoid web wallets.