@MR_CHENNAREDDY  The Upgrade Accelerator not only upgrades single cell free form layout but also supports Column format and Row format free form layout specified in the Help section. So please check Help section in Pega 7 Upgrade Accelerator Pack landing page for more info.

The freeform layout is a one-off page layout. It should never be used in Pega 7. What differentiates a freeform layout from a smart layout is that the columns of a smart layout have column types of Label, Field, or Spacer that align, while freeform layouts do not. 

Any changes to your design when using a freeform layout means that you have to fix every single section. This is primarily why you should never use a freeform layout. With a dynamic layout, you do not have to change a single section; the change is only restricted to the skin

You can convert a freeform layout to a smart layout by changing the column type of all its columns.

Free form layouts should strictly adhere to the Row format or column format, that means it should be in the combination of Label and control. If its not adhering then it will not convert.eg if it contains a label  it will not convert it to dynamic layout.

You have to create four dynamic layout formats in your application skin before running this tool. This is because OOTB dynamic layout formats will have by default label on top. So if you have free form layout with label on left then this 4 dynamic layout formats should be there in the application skin to convert free form layouts to dynamic layouts with same look and feel as how it was earlier.

As a best practice you should be utilizing dynamic layouts .