Freefire is a command in the bottom right menu that authorises your Armed Guards to use lethal force. This means any prisoners that are rioting or resisting will be shot on sight. Usually if Freefire is disabled Armed Guards will only shoot a prisoner if a staff members life is in danger. Instead, they will use their Taser. It also causes Snipers to shoot on sight for those rioting, escaping, fighting, destroying, or spoiling.
The Freefire command is available when you hire your first Armed Guard. The "Armory" research is required to unlock Armed Guards.
Be wary of enabling Freefire during Riots, as it tends to kill a lot of prisoners, which may lead to you failing the game due to Criminal Negligence.