False: free rank is not monotone under subgroup embeddings. In fact every finite-rank free group embeds in , hence in every with . Let freely generate a rank-two subgroup and set for .
To prove that these form a free basis of a group for their subgroup, take a nonempty reduced word and combine each maximal run with the same index into a block , with and . Its expansion is
Every interior power and every power is nonzero, so the free reduction leaves a nonempty word. This proves the conjugates of one free generator freely generate property and injectivity of . In particular,