I did not look for other work - really needed a break, and luckily cost of living in my country is pretty low so I could afford it.
2 months later I feel much better and I would like to get back to working, though I would like to have more direct control over how expectations and deadlines are set - so I thought that freelancing would be good way to get that.
I'm wondering if I am thinking in the right direction here, and also how the situation is on the freelance market currently, I did some reading up and I hear that AI has caused a lot of competition/spam on Upwork and other platforms.
The answer to these questions will help you determine what should be your next thing. But just fyi, freelancing doesn't mean there are no deadlines. In fact, quite the opposite. However, you do have the option of being selective (if you get to that point) and that can be a good thing.
Freelancing/consulting has unfortunately a lot of this. It helps if you start within your existing network, but once you branch out it gets stressful trying to please your clients.
What has worked for me is to work hard and fast. Deliver the results. Then take time out. This cycle works for me, because it typically takes some time to secure the next contract. When working on a contract, I don't have time to look for the next one.