I think that players are worse when you play with play money, thats why you think you play better, personally I don't like playing online poker on play money because its not that exciting and you don't get that "rush" playing play money. I think there are a lot of people who don't take play money serious and can't focus on the game because it's play money.
Play money seems pointless once you have started playing real money, I do think that some of the play money games are a better standard than a freeroll with 4000 players where half the field is all-in first hand
Play money is no good. It is okay if just trying to learn the hands and gain a basic familiarity of the rules and how it all works but the standard will be awful and people do not play like they would in real games. Freerolls can still be quite good practice as there is something to win so players may play a bit harder. But when people are putting in their own money obviously they have something to lose so the standard is different again.
Play money is only good to learn how the basic game works. You will learn vary bad habits and you will see hands played differently than in real money scenarios, so really I would recommend sit n gos or micro tournaments where everyone gets a set number of chips and you not watching your cash, just your chips. It takes away the idea that everyone has more money than you so you not making mistakes costing you money by limping and playing passive
I believe the term "play-money" says it all. It's hard to get the real feel of poker without any risk. In a freeroll you're not necessarily risking anything other than your time but you are compensated if you make it pass the $-bubble.
It is what always happens and what should always happen, the fictional one is to practice, know the soft and take knowledge, real money is the pure truth and once there you should start to train more and more to win.