This case has no impact upon free will, in and of itself.
Godstone would seem to be an effective coersive force, but that does not prevent my free action. I simply have another factor to consider in making my decisions. While “Free will [may be] pretty much an exercise in self damnation,” it can still exist. Ghandi opposed British rule knowing that they had power over him and would punish him.
If God exists and is entirely spiritual
Well, “having no interaction with the universe other than the spirit” disqualifies most of the Old Testament, so I assume we are not talking about a Christian conception. Still, I see nothing in your examination of this case that actually addresses the question of God’s (or man’s) free moral agency.
For instance, it might be possible that all of those and only those whom God’s spirit has touched in a particular way have faith. This would mean faith was not a free moral choice for humans, merely a “programmed” reaction to a particular touch of God’s spirit. Likewise, one might argue that the Spirit that is God lacked sentience entirely and was merely a channel (or a catalyst) through which other spirits experienced change. That would begate any question of free moral action by “God”.
I doubt either of those possibilities matches your personal subjective experience, but your personal subjective experience cannot be called a compelling argument for the attributes of a God whose objective existence crosses al reference frames.
if God does not exist . . .
This, of course, makes sense only if one has first defined “good” in terms dependent upon “God”. In fact, if one has done so then the non-existence of God would indeed make such an orientation delusional. However, it is trivially possible to define “good” without reference to “God”.
In no way, however, does the above reflect upon free will. It is entirely possible that a universe without God could exist in which mechanistic principles determined every action and result. Inhabitants of such a universe would have no free will, though they might enjoy the illusion of free will. Some people, in fact, believe that such is the case with our own universe.