I've never had this option but it would kinda make sense that it's been greyed out because it's a stupid decision considering the law. No offense to people who want to free them, but just think about it for a second : freeing any elve would just put them in danger. Someone else could just enslave them and there's nothing MC could do about it because they wouldn't be "his" anymore. We need to change the system first before we can free them.
Same, I don't remember any choice to "free" her. Though I'm litterally using the same argument as when we first meet Sylvia. Sylvia tell Lin to flee and be free, but Lin (or the MC I can't remember) tell her they would just end up being taken by another human, probably less nice than the MC (and with a smaller dick).
So until the whole system changes, they're better off with MC. There's no point in freeing them at this point of the story.