If they are making it so you can put in your own discs, of course it'll be free. It's pretty much guaranteed that is how PS4 games will work. I guess it is possible that the other systems will just use games off of the PS Store.
Well yeah, of course. I thought you were talking about the emulation being presented in the topic in relation to older PS consoles being available on PS5.
but yeah, you are right, PS4 discs should work.