I have a lot of free time.

[Freeguy]

What's wrong with the second one?

A. I have a lot of free time.
B. I have much free time.

 

[Ali Hsn]

Hello!

*I AM NOT A NATIVE OR TEACHER.*

"Much", as a determiner, is normally used in negative sentences or questions: "I don't have much free time."
"A lot of" is often used in affirmative sentences, though it can be used in negative sentences and questions as well: "I have a lot of free time."

 

[Tdol]

It's not wrong grammatically, but, as Ali Hsn says, we don't use it much in affirmative sentences.