Does iOS come with a free vpn?
No. You probably have one from either an app or added it yourself.
General → vpn and device management
Icloud private relay is something kinda similar to a vpn, but only for safari and with some major drawbacks
No, it cost $999 
. Also that VPN toggle in settings doesn’t do anything. I always have to open VPN App to turn ON VPN. Also there is new feature in iOS 15 called iCloud Private Relay and it acts like a VPN but it only works for Safari but unfortunately it is only limited to some country 
Also that VPN toggle in settings doesn’t do anything.
Sure it does. If I turn mine on it connects to the VPN running on my home network.
There are also many other ways to utilize VPNs attached to that switch. However, most commercial VPN that users subscribe to for privacy are configured by download an app because that greatly simplifies setup.