Software can be free libre while access to the network is limited at the same
time. They are not mutually excluding.
Simply, they give the inmate the tools needed to browse the intranet or local
files, but the wide area network is out of reach.
Only restrict as little as absolutely necessary to make the service work
inside the prison system while not risking security. It could be supervised
or time-restricted, or based on behaviour and earned points. If abused, the
right can be revokes at any time.