So a bit of an update -

the problem didn't seem to disappear so I called IHG customer care people.

Apparently IHG hotels can, at their discretion, levy a room charge for a "free" night certificate in addition to any resort fees, service charges etc so the adviser explained it is perfectly possible for the free night to incur costs of circa $150.

There is no quick way of knowing which hotels do this unless you attempt to book using your free night and review each selected hotel individually.

Another disappointment from IHG from my perspective. Perhaps the "free night" certificate should be renamed "discounted" - seems very misleading.