There is quite a gap between the atomic happenings in nature and the reasoning of human minds - one may choose the appropriate model depending on the situation. For example the simple rule that you may not steal as you would get punished is made to people viewing them as subjects of their own decisions. It would be quite hard to show the purely physical effect of that letters on a piece paper causing most people not to do so. This is explained in other terms: Who would decide to do so desipte of the punishment? It is a different level of understanding.
When it comes to the consequences it is not such a big difference between calling criminals morally corrupt or simply disfunctional.

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If watching two people playing chess they sit there and think about their moves. At the very least they think they are making a decision there. This is free will. They do not just sit there, looking at the board and suddenly see their hand move a piece.
The abscence of subjectivity - and hence free will - is something associated with extraordinary or clinical conditions of the human mind like being drunk, drugged, shocked or more generally: the perceived loss of self-control.

If showing people a sheet of paper - half white and half black - they will recognize a difference between both halves. This cannot be explained without relocating the source of the observed difference into the external world: If there is an observed difference there must be something which causes it. Whatever that might be.

Free Will is a precondition to recognize human beings as subjects. The phrase "to make a decision" already acknowledges subjectivity. Otherwise it would be a mere reaction on circumstances.
For an in-depth study of this problem I'd suggest Kant's critiques as literature.

There is clearly many gaps in our understanding, most likely due to the limitations of the human mind, no matter how versatile it may be. — TogetherTurtle

On the other Hand mental products are the kind of things we can assign a definite truth value on. Like mathematics: We just define something to be true or false and conclude from there. And - of course - your initial statement that we can do this for all statements is the natural stance we take towards matters to organize them. But there is a degree of freedom which point of view to take towards things. This is reflected in phrases like the application of mental models.
There is do discordance over the measurement having shown a certain value but how to interpret it.
If we are at the point where "preference" is the right criterion there must be many equally appropriate models to chose from.

AI is exciting only when one cannot forsee what it will do.

But it certainly couldn't make that story. The story, the hypothetical possibility-story, was already there, as a system of inter-referring abstract facts. — Michael Ossipoff

But this assumes a similarity between the simulation and the world. In a matrix-like scenario humans might be some kind of giant octopus in the real world and what you call "sense" just some random noise in some curcuits which "you" - whatever that would mean then - are making sense of.
A simulation of nerve-impulses fed into your ganglion might be the whole thing. In this scenario the simulation is something outside the "simulation".

Paradoxes are interesting. Consider "This sentence is not true."

We may not know exactly where the particle is, but we are certain that the particle is somewhere just because we don't know where it is doesn't mean it doesn't exist and isn't somewhere, that was my argument. — TogetherTurtle

This is a difficult question. When I listen to physicians I get the impression that the uncertainty is really attributed to nature itself like: the particle there is really some "potential" to manifest as a particle there.

What do you think about? — Belter

I guess some propositions are wrong. Saying a simulation in the future is equally likely and unlikely does not take the specifics into account - we'd have to develop such a system. No idea what the odds are objectively, but saying that a-priori it is equally likely that we succeed or fail in doing so is just... unbelievable.
One has to make up mind on this. Either one decides that given enough time such a system can be built or not. With the unquestionable universal superiority of the human race in mind we can say for sure that we could easily do so. But - would we? Again this is not flipping a coin. Think about it

The answer is always yes or no, even in quantum physics, the answer may change upon observation, but it is always either yes or no at one given time, no matter if it fluctuates. — TogetherTurtle

In QP you get answers like "maybe" if you ask if a particle is exactly at a given spot.
On the other hand the subject here is philosophy and hence the human condition. I'm not yet sure how that sentence contradicts human freedom but I am sure it does...

I guess the Turing-test is much too technical. Over the procedure the main point is forgotten: There is no self-conscious AI until it proves itself to be one.

read Heidegger...
There seems to be something special about it if one can make a difference between "a human" and "a human being". What is it that gets emphasized? This is not to say your definition was wrong nor that I'd think this should really make a difference in this context (aside for the sake of the argument).