SalesOrderBeforeSaveObserver.php

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<?php
namespace Magento\Payment\Observer;

use Magento\Framework\Event\ObserverInterface;

class SalesOrderBeforeSaveObserver implements ObserverInterface
{
    public function execute(\Magento\Framework\Event\Observer $observer)
    {
        $order = $observer->getEvent()->getOrder();

        if ($order->getPayment()->getMethodInstance()->getCode() != 'free') {
            return $this;
        }

        if ($order->canUnhold()) {
            return $this;
        }

        if ($order->isCanceled() || $order->getState() == \Magento\Sales\Model\Order::STATE_CLOSED) {
            return $this;
        }
        if (!$order->hasForcedCanCreditmemo()) {
            $order->setForcedCanCreditmemo(true);
        }

        return $this;
    }
}