GerryM, I'm not sure I understand your concern.
The only difference between the free tour and the paid tour is the business model. Either way, you pay. I can't imagine it makes a difference to the guide whether they are paid by tips or by their employer, except when they are paid by tips, they might have more incentive to provide an enjoyable experience.
There is another post on here about 5-star reviews (https://community.ricksteves.com/travel-forum/trip-reports/trip-report-reviewing-an-airbnb-controversy). It was related to Airbnb, but it's ubiquitous across the travel business, and it definitely applies to tours like this (free and paid). The guides are under a lot of pressure to get 5-star reviews. Same whether it's free or paid.
Many of the free tours are led by apprentice guides. The companies running these tours train the guides, who can graduate into more lucrative positions, running paid tours with the same companies in some cases, branching out as freelance guides, or getting licensed and certified as official tour guides. It can be a positive thing for the company, for the guide, and for the customer.
And say what you will about the annoyance of having to pay part of the server's salary at restaurants in the US, but the flip side of the horror stories you mention is the horrible service encountered in many European restaurants where the servers make the exact same salary whether they provide good service or not.