Well, a lot of authors don't read contracts, or don't understand them if they do read them. Some authors think that's what agents are for. And it's possible that Random House doesn't specify what constitutes promotional use (but I doubt it).
I do agree that judicious promotions and freebies are good for an author's career. Usually the readers who pick up a book for free wouldn't buy it in the first place but they might buy the next book by that author.
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