When my parents divorced I ended up with two very loving parents but one very liberal and one very strict. I kind of feel like I had the best of both worlds, I was given rules and boundaries on one side which taught me their value, and in the other I was able to find where I put my own rules and boundaries, using some direction I’d learned from strict parent.
I was pushed into structured activities by strict parent, far too many to list including guides, scouts, volunteering, music, theatre and sport, and liberal parent let me roam totally free on their time (as long as they knew their basics: who, where, when, what. I was free to make choices but they did want to know I was safe). Never been in trouble with the law, have a good education, never had issues with alcohol, drugs etc, have great reliable friends.
Amusingly enough the only thing strict parent never pushed on me was Christianity. Even when in the discernment stage of ordination, I was given complete freedom there.
I think all the best parenting starts with moderation. You try and start in the middle with the best of everything. Reward and punishment. Rules and freedom. And then is tailored to each child to make it perfect for them.
Specifically to your question, when I was well looked after, but had zero rules except the expectation I wouldn’t break the law, it worked well for me, but by this time I was 11. I knew right and wrong and so I was able to set my own standards. I cut off friends that wanted to go down the drugs path and things. I’d put my own limits in place. For people similar to me I imagine it would work well for them too. For others like my brother, it didn’t because he couldn’t create his own values and was always swayed by peer pressure into things my parents considered unacceptable, and the rules were put in place universally.