As for your first question, if you release the game free and make no money from it in any way then yes you owe Epic nothing.
If you make $3,000 per product per quarter you pay absolutely nothing to Epic. The 5% is only applied AFTER the first $3,000.
So like in Darthviper’s example, if you make $4,000 every quarter you will only need to pay $50 back to Epic.
Even if you made an amazing $33,000 per quarter you’d still only pay them $1,500 back.