Denote category of monoids equipped with involution by $\textbf{invMon}$. Objects are pairs $\left(M,\iota\right)$ where $\iota$ is a map on the underlying set of $M$.
Denoting $\iota$ by $x\mapsto\bar{x}$ we have $\bar{\bar{x}}=x$ and $\overline{x.y}=\bar{y}.\bar{x}$. Arrows in $\textbf{invMon}$ are homomorphisms that respect the involution. There is a forgetful functor $U:\textbf{invMon}\rightarrow\textbf{Set}$ and it has a left adjoint $F$.
Every group equipped with the map $x\mapsto x^{-1}$ can be recognized as object of $\textbf{invMon}$ and every group homomorphism respects this involution. This gives a functor $I:\textbf{Grp}\rightarrow\textbf{invMon}$ and if $L$ is a left adjoint for $I$ then composite functor $LF:\textbf{Set}\rightarrow\textbf{Grp}$ should sends each set to a group free over the set.
For object $\left(M,\iota\right)$ define $S=\left\{ x.\bar{x}\mid x\in M\right\} $ and $R=\left\{ 1\right\} \times S$. Let $C$ be the smallest congruence containing $R$ and let $M/C$ denote the 'quotient-monoid'. Then $\left[\bar{x}\right]\left[x\right]=\left[x\right]\left[\bar{x}\right]=\left[1\right]$ showing that $M/C$ is a group with $\left[\bar{x}\right]=\left[x\right]^{-1}$. So natural map $\nu:M\rightarrow M/C$ respects involution, hence is an arrow $\nu:\left(M,\iota\right)\rightarrow\left(M/C,inv\right)$ in $\textbf{invMon}$. Also $\left(M/C,\nu\right)$ is universal in the sence that for every arrow $\psi:\left(M,\iota\right)\rightarrow I\left(G\right)$ in $\textbf{invMon}$ there is a unique group homomorphism $\phi:M/C\rightarrow G$ with $\psi=I\varphi\circ\nu$. This means that $I$ indeed has a left adjoint.
Then here we have the construction of a free group over a set that does not mention any equivalence classes of words or any reduced words. I am very suspicious, however. This because I never encountered this in literature.
My question is:
Am I overlooking something?
My second question is:
If it is okay then where can I find it in literature? I can't believe that it is new.