I am the project manager at Moodle currently overseeing the next phase of the MoodleCloud (hosting) project. I'm happy to respond to your concerns.
One of the tasks we are currently working on for free sites is the process of removing inactive sites. The basic plan in place is
- identify an inactive site (no user has logged in within 60 days)
- send a notification with a time frame - 7 days - within which someone (the site admin, or any user) can login
- do a second check for inactive status, and if someone has logged in, then it remains in normal status, but if no-one has logged in (now 67 days), only then is the free site is removed.
I hope you are getting the most out of your Moodle free hosted site,