The development version does.

I can tell you, though, that this doesn't really matter in real life. The compiler warns you when you use a free variable, so it's pretty hard to accidentally misuse a dynamic variable. There are pathological cases that people point out, but these rarely matter in elisp that most people actually write.

Programming Emacs is a little different from programming other systems, but once you use its idioms instead of the ones you took from your favorite language, everything works quite nicely.

Oh, it's not so much a problem of using a free variable by accident--where the compiler can help you out--but of not being able to use proper closures.

I agree that emacs lisp can still be used to productively write software. People put up with much worse things.