The 'free' offer might seem "scammy" to some because a potential customer must make a purchase transaction before discovering whether he is one of the 10 to get a refund. He could therefore feel there is a risk of being 'tricked' into purchase, even though he had the set expectation that it would be free. Since he can't know beforehend if the item will be free until after he pays for it, it could be like the scam where there is a rebate offer but the company never fulfils the rebate offer (after all, nobody is omniscient enough to know whether he is buyer #10 with a rebate, or buyer #11 that get screwed. The seller is relying on that and going to get inflated sales based on suckering people to buy expecting a rebate.
It's like a bait-and-switch tactic, or posting a sales ad with a really good deal that only turns out to be a 'typo,' or selling an item with a rebate offer that is bogus. These sort of scams are used by shady businesses to trick victims into showing up at their store. Since the victim already expended the effort of showing up at the store, the victim has an incentive to buy something to make the effort worthwhile (or so the scammer thinks - often times the victim is pissed off enough to never do business with the scammer again).
Would you buy something with a rebate offer that may or may not get fulfilled, depending on how many people send in their form and whether they are faster to the post office than you? I don't think so.
