It does. They obscure the usage of non-free hardware/firmware by not shipping it as part of the OS, but as a bundle on separate flash storage that is loaded into the OS by initrd. That blob is updatable as "firmware". The 100% free open-source is just marketing. It's just for the OS. A lot of the hardware and firmware is proprietary.

https://github.com/linuxboot/heads/blob/c859c28b88b7bc197c16...

https://forums.puri.sm/t/the-librem-5-blob-list/28815/26

Depends where you draw the line. There is not a single non-free blob in the OS that runs there once the bootloader is up (unless you put some there by yourself, which you're of course free to do).

No true Scotsman would ever use binary blobs.