I discovered the same issue today with my always-free VM. This Redit post from a few months back is really helpful.
The solution is to create a backup of the boot volume, then terminate the stopped VM instance without deleting the associated boot volume, and finally create a new instance matching the specs of the original VM using the "Create Instance" option from the boot volume page.
The Redit post provides a nice, clear set of instructions. Worked perfectly for me.
As to the reason for Oracle disabling the instance in the first place, @Anupam's answer is very helpful, though I'm not sure where this info came from. I certainly didn't get a heads-up email like the one sent out when Oracle indicated they were going to pause my transaction database.