The Wikipedia article suggests that Stallman understood it as "Free (University (Compiler Kit))" only to find out that it was "(Free University) Compiler Kit":

The Wikipedia article suggests that Stallman understood it as "Free (University (Compiler Kit))" only to find out that it was "(Free University) Compiler Kit": > When Tanenbaum advised him that the compiler was not free, and that only the university was free, Stallman decided to work on a different compiler.