That does not imply that anyone "could travel, immigrate, and settle all around Europe without papers" at the same time. Wherever I look, I am finding various requirements for documentation, permission and restrictions. They might be more or less strict, but I did not succeeded in finding period where whole Europe would allowed you to move and settle freely without some of that.

And even less the part "prior to a certain mentally challenged emperor deciding to ruin it all" where I really dont know who the original person means.