Yep, that's how they're supposed to work.
In my experience, the cheap/free ones tend to work the poorest if at all. Not always, but often.
Over in St. Michaels on the Eastern Shore, there are some "subsidized" pump-outs that frequently are inoperable. But the $15 pump out at the private marina (the one that caters to "upscale" boats) always works flawlessly. I like to kid the dock attendants about their price by complaining: "But the other broken pump-outs are free!"
An empty holding tank: Priceless.