Sure, but you can get great use of it for a long time, as long as they judge the viral growth outweighs the possible revenue they could get.
I'd be more worried about the VC funding they've taken ($15M according to crunchbase). It may take years, but eventually, somehow, VCs will need to get their money back. That may be an IPO and then public market scrutiny, it may be acquisition, but if the company is a going concern, the VCs will want ROI.
Cloudflare, which went public in 2019, has done pretty well with their free tier, with their reasoning being[0]:
> Our free customers create scale, serve as efficient brand marketing, and help us attract developers, customers, and potential employees...
So for as long as they note that free Tailscale users are worthwhile for how they are effectively free marketing and attract clientele, it shouldn't be a problem. Tailscale doesn't proxy traffic either so the overhead of having free tier customers shouldn't be huge.
I'd be more worried about the VC funding they've taken ($15M according to crunchbase). It may take years, but eventually, somehow, VCs will need to get their money back. That may be an IPO and then public market scrutiny, it may be acquisition, but if the company is a going concern, the VCs will want ROI.