Is Macintosh System Software 1.0 (Classic MacOS) Free?

No, System 1.0 is not open source and not in the public domain. Apple provided it with the purchase of a Macintosh. The system software was not available for separate purchase.

History

With MacOS 1.0 you are probably referring to the first version of Apple's operating system.

In 1984, with the release of the first Macintosh (128K), the system was actually not called MacOS but was just Mac System Software.

Apple has called it MacOS since version 7.6.

You can read (and learn) a lot about it on Wikipedia.

Emulation

About an emulator of the first Mac system. There is one you can use : mini vMac

• It will require a ROM to run vMac
• and finally a disk image of the system

Unzip everything, start the mini vMac, it will load the ROM and you'll get a blinking floppy with a question mark because it couldn't find the system. To solve it just drag the system image over vMac and the system will start !

The answer to your question is kind of complex. Here are the bullet points:

• Apple has never open-sourced any version of the operating system that ran on Macs prior to Mac OS X.
• Prior to System 7.1 (as it was called at the time), Apple did provide versions of the System software free of charge. System 7.5.3 (and an updater to System 7.5.5) were also eventually made available free of charge, but that didn't happen until years after the fact. None of these versions are open-source.
• On non-PowerPC systems, the System software depends heavily on the Mac ROMs. These have never been made available free of charge. Also keep in mind that the first version of the System software to run on PowerPC systems was System 7.1.2, so everything before then would need a ROM, and you can't get those.