The first draft isn't entirely free-form. Without realizing it, and even when you're consciously "not editing", you're still pushing the writing forward, moving the plot along, being slightly self-conscious. Even in the first draft, you keep some of the guidelines of good writing in mind. If you've ever thought "this isn't good but I'll worry about it later" and went on with the scene, you have been keeping an eye on your writing - being self-conscious.

Good, tight, consistent writing comes about by being very self-conscious at all times after the first draft. A lack of self-consciousness leads to inconsistencies like a character knowing something he shouldn't, knowing some important piece of information then not knowing it a few pages later, or having a crucial skill revealed exactly when it's needed.

Throwing your readers out of the story by jarring them with such inconsistencies or implausibilities is generally considered a bad thing, and for good reason; too many jarring interruptions like that and readers get frustrated and start to dislike your story. By constantly questioning your story, by constantly checking the timing and consistency of events and descriptions, you make the reader's trip into your story's world much smoother and more enjoyable.

Self-conscious writing, whether description or dialogue, does not mean that it feels stiff, false, or any number of adjectives piled on it by some. If anything, the time spent verifying that it is consistent, well-phrased, plausible, and in character makes it glide more smoothly past the eye when read.