Another way of looking at this is that scammers can probably afford to spend $5-10 on a TLD since it's just a cost of doing "business" to them, but many kids can't.
I was very happy about free TLDs back in the day as a teenager, since I could just try things out before having to convince my parents to let me use their credit card to register a proper domain name.
It's infinitely easier to spend $0 vs $0.01 if you're trying to be anonymous online. The criminals can certainly afford it but that also almost certainly means interacting with financial systems that leave a paper trail.
I doubt that that's any kind of obstacle to criminals.
At a quick glance, many registrars and hosters seem to accept crypto, and anyone can buy prepaid Visa and Mastercard cards anonymously for cash for the ones that don't.
I was very happy about free TLDs back in the day as a teenager, since I could just try things out before having to convince my parents to let me use their credit card to register a proper domain name.