I didn't find anything against having both a paid app and a free app in the Google's Policy Center.
While you can't have two apps called the same thing, e.g., both apps called 'your app name', you can have one app called 'your app name' and another app called 'your app name pro'.
I found advice going back years saying one just needs to create a separate project like this. And here is the most recent source I found saying the same thing and it goes further and lists apps that are on the store with both paid and free versions. I also did my own search and found this example: My Lightning Tracker & Alerts is free and My Lightning Tracker Pro is a paid app.
And regardless the dev saying they won't use the data from paid users -- that doesn't matter to me when legally by using the app I signed away permission for that data to be collected.