Demented, you need to keep a check that the stuff you are eating is really free, and that you're not unintentially cheating. But basically yes, you can eat as much free food as you like. The idea is that much of it is bulky/filling and lacking in calories.
Eg, yes you can have a whole packet of bacon, but you're limited as to what you can have with it (eg brown sauce has syns, bread would use a healthy option so also limited etc).
I don't want to compare SW with Atkins as they are very different, but the "as much as you like" element is similar. Atkins is another "as much as you like" (though the choices are much more restricted). When the BBC team researched it for 6 months they discovered that although people could eat as much as they want, in general they were consuming fewer calories than normal (and hence losing weight).
So yes, you could eat 50 Muller lights per day in line with the rules of the diet, and probably you won't lose that much weight. But the diet works because in general you will settle down and have say 3 a day, and as you will be having those instead of bsicuits say, you will lose the weight.
So feel free to eat as much as you want. You needn't feel hungry.