I guess the point I’m making is that Freetrade need to make their money somehow and the FX rate was clearly advertised as such when you signed up. The fact you’re not being charged an FX fee at the moment for dividends is an extra bonus, but not what you agreed to.
However, the other point is that being able to keep funds in USD would be advantageous. There probably needs to be some way for Freetrade to make some profit so you don’t keep reusing the same money and earning them nothing, e.g. maybe you have two pots, one you get charged an FX fee to do GBP to USD, and another that receives USD when you sell shares. To convert from either pot back to GBP you can pay the FX fee and when you buy shares, it uses it from the non-sell pot for free if if can, and any extra it has to take from the sell pot has an FX fee charged. That way Freetrade still earn some money for supporting foreign trades, but we can also avoid exchanging an unfavourable rates.
This plan isn’t very well thought out, but it’s the start of an idea. But like I said, the current FX fees are reasonable, it’s just the fact we have no control over when we do the conversion that works against us.