Since the last update (Version 12.0.1030895) the free camera zoom range does not increase anymore after enabling the free camera in the gameplay options.
The maximum zoom level is equally close as the maximum zoom level without the free camera option enabled.
Asterix is correct, the update reset several of the game's options.
However, what you're describing is not a bug:
To increase the camera distance, you will have to go into the "Gameplay" options and toggle the "increased camera distance".
"Free camera" has no impact on the maximum zoom, it just defines if you have pre-defined zoom levels or can zoom smoothly.
devtrackers.gg