Is Prop Hunt (Hide and Seek) free?

Yes. Prop Hunt (Hide and Seek) is released under Community and costs nothing. Neither it nor Team Fortress 2 has any paid content.

What do I need to run Prop Hunt (Hide and Seek)?

Team Fortress 2, which is itself free. Prop Hunt (Hide and Seek) is an add-on and will not run standalone.

The PlayBound Launcher installs it in one click from Team Fortress 2's mods list. You can also install it by hand — full steps are on this page.

Roughly 65 MB, on top of the base Team Fortress 2 installation.

Yes. The source is published at github.com/Geek-Tware/TF2-PropHunt under Community.

Prop Hunt (Hide and Seek) — Free Team Fortress 2 Mod · PlayBound