Earlier quoted context omitted.
I don't know if it can be called free. But section 13 of the SSPL is certainly incompatible to RHEL's distribution model, or any other linux distribution I know of. In particular it requires you to license "the Corresponding Source for all programs that you use to make the Program or modified version available as a service" under the SSPL. That naturally includes the linux kernel which is licensed under the GPL - and…
But they don't make it available as a service. They distribute binaries and perhaps source code.
They still usually don't, because it would break the automatically trouble-free property of their distribution. If users have to check the license of software before using them, there is little point in packaging all of it together and automatically installing, so there is little point on making a distro at all.