The school my kids attended in young elementary, is a K-8 school. They didn't restrict free reading. I never heard of a problem with a parent sending in a child with a free reading book. But they did restrict what part of the library the kids could select books to borrow. This was partly due to a supervision situation. The library was a mixed library, media center, hallway, and is quite a large open space. (Even through the move to a new school building.) This was often solved by having a volunteer parent around during library time.