Green’s Dictionary of Slang

free-world adj.

[free world n.]

(US prison) pertaining to the non-prison environment.

[US]M. Braly On the Yard (2002) 9: The politicians in their pressed pants [...] their polished free-world shoes, and expensive wristwatches.
[US]B. Jackson Killing Time 183: There was just three free-world guys over Tucker: the one that was over the field and the superintendent and another one that was over the horse barn.

In compounds

free-world girl (n.) (also free-world gal, ...punk) [SE girl/gal n. (1)/punk n.1 (5)]

(US prison) a jail homosexual who has also been a homosexual in ‘civilian’ life.

[US]B. Jackson Thief’s Primer 39: There are three basic participating sexual roles in prisons for men: stud [...] punk [...] and queen (free-world punk; person who plays the same role as the punk but who is actively homosexual in the free world as well). Both queens and punks are sometimes referred to as gals. [Ibid.] 173: A free-world gal, she’s not going to mess with one of them rums anyway [...] she’s pretty goddam choosy.
[US]C. Shafer ‘Catheads [...] and Cho-Cho Sticks’ in Abernethy Bounty of Texas (1990) 204: free-world gal, n. – homosexual inmate who was gay before entering prison.