Is it possible on the free edition of macrium reflect?
It's physically possible, but can have undesirable side-effects.
In effect, Macrium Reflect (or any other backup product) will copy the disk in sequential order, hopefully locking each file whose sectors it's copying at the moment.
However, if the application you're using is dependent for its correct functioning on an ensemble of files which it modifies, it's possible (although low-probability) that Macrium Reflect will copy some of these files before they were updated, and copy the rest of the files after the update.
The result will be an incoherent group of files, which might cause this application to malfunction if you ever restore that disk-image. Which is why it's advisable not to use the computer while Macrium Reflect is imaging the disk.
Some applications, like the browser, will automatically recover an incoherent disk cache, and so are safe to use. Others may be more touchy.
Yes, it uses the Volume Shadow Copy Service, which is capable of backing up files that are open or locked.