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My understanding is that it does allow for visa-free travel and certainly it does in practice since there are no checks. But theoretically at least you should still not exceed the Schengen visa limit of 90 days in 180 in any country other than the one you have residence in. Obviously, if you are coming from a 3rd country, this can be checked when you enter and leave the Schengen area. For UK nationals who have residence in an EU country, I think it would only become an issue if, for example, you decided to go to France for more than 90 days and, as a result of French domestic checks, they realised that you had been in the country for more than the 90 days.
It seems that the new system is still bedding down though – quite a few UK citizens in the EU were getting passports stamped (notably by French immigration staff) at the beginning of the year. But then they changed their procedures so that if you show an EU State residence permit, they will not stamp your passport.
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How was your trip? My visit is still on for July 9th. Any “must sees” that I shouldn’t miss while I’m there. I’m not sure how much will be open yet.