A couple of things -- first, I listened to many of the books instead of reading them (job involves a lot of car travel, so it works out well). So I can't easily refer back to the books, and therefore apologize if I misremember something that was explained. Also, I'm approaching this from a "many universes" perspective. Okay, that being said:
I'm not sure free will is necessarily violated by time travel. If Harry goes back in time to fix LC, he would be alone in his basement (except for Bob, who may or may not have noticed). So even if free will resets and everyone has the opportunity to make different choices, there really aren't any new conditions that would lead them to make different choices. If you travel back but don't interact with anyone (or, in Bob's case, only interact with those that can understand the implications of telling your past self you were there and agrees not to -- or agrees to forget the interaction), there isn't really a reason to think free will is violated.
Looking at the issue with the assumption that there are infinite universes based at least in part on decisions that are made, there must exist a universe where Harry has the knowledge and power to time travel, as well as the knowledge of the need to fix LC. When that Harry travels back in time to fix LC, he collapses all those universe divergences back together and makes his change. So his actions redefine the conditions under which choices are freely made.
I'm not saying it's the most likely option, but I don't think it's impossible.