In the Advanced Simulation help, section Mesh mating conditions it is written:
Free coincident mesh mating conditions With a Free Coincident condition, the software aligns the mesh on both the source and target face but does not connect the meshes. With Free Coincident, this results in duplicate nodes at the interface between the source and target faces. This is useful, for example, for setting up surface-to-surface contact problems. See Surface-to-Surface Contact overview for more information."
In the Nastran NX help, section Surface Contact for SOL 101 paragraph Understanding Source Regions and Target Regions I can read:
"In general, of the two contact regions you use for the pair, choose the one with the finer mesh for the source region. When the source and target regions have different mesh densities, more elements on the source region will mean that more contact elements are created, which will produce a more accurate solution."
So it seams that for a better solution it is desirable that source and target regions have different mesh densities.
Why then is it suggested to create a free coincident mesh on the two surfaces???
The best contact results will be obtained from two surfaces with equal size and mapped meshes of equal size (plus if mapping with CTRIA6 elements, diagonals should match too). Second best option is to have the free coincident approach (although if you place a mapped mesh on that it would be the same as first case). Third best option, if contact surfaces cannot be made equal size (such as by using surface split command) is the recommendation given in Nastran help files, the smaller size surface (and by extension smaller size mesh) should be assigned as source, the larger surface (also with larger size mesh) as target. The worst case is to have your large surface as source and small surface as target.