This letter is incoherent drivel. It doesn't define free speech at all. It just says don't offend people. But the whole point of free speech is that it is a right to offend. "I may not agree with what you say, but I will defend to the death your right to say it."
The only generally accepted limits to free speech are those examples that are given when they cause an imminent and immediate harm- shouting "fire" in a crowded theatre for example, or the more problematic, inciting crowds to violence.
Now it could be argued that JK Rowling was inciting to violence those vast crowds of transphobic violent mobs baying for the encouragement to hunt down the local queer with a pitchfork. Or possibly she wasn't doing that. Given that she wasn't speaking to vast baying mobs. As far as I can see there were no dog whistles in what she had to say, just that she insisted that the rights of women are distinct from the rights of trans people and need to be defended distinctly without being conflated.
At the end of the day, no free and democratic society can exist without freedom of speech, because criticism of political power is all too quickly suppressed as 'offensive'. Therefore the greater good of holding political power to account is defended and the damage of offensive speech is accepted as the price of living in a society with free speech. It is as Locke pointed out, the easiest way for nonsense speech to be exposed as nonsense is by having open discourse. Well done hatchette for standing by classical freedoms and rights.