What does it mean if a transsexual is hormone free?

It means they not currently taking hormones. Hormones have the effect of giving TS women softer skin, more feminine facial shape, wider hips, developed breasts, etc. They give TS men facial hair, a more masculine shape, and, notably, a deeper voice.

If the person is not taking hormones, they are either in the early stages of transition - before hormones have been prescribed, or they are transgendered rather than transsexual and have decided to forgo a full transition.

They will remain showing the secondary sexual characteristics of their birth gender, and retain sexual potency (as hormones will often cause sterility or a complete inability to "perform").