Presumably, the RAM was a rounding error in the total budget.
And this move eliminated an entire class of bugs (use after free).
edit: And, you don't have to worry about memory fragmentation, or how long free() might take in the worst case.
In 1996, Ariane 4's successor, Ariane 5, took its maiden voyage to carry the Cluster constellation into orbit, when this happened https://www.youtube.com/watch?v=gp_D8r-2hwk&t=54s
Ariane 5 used a different launch profile. The impossible was now possible and the 16 bit value overflowed. The inertial reference system failed, along with its backup (which was running the same code), causing the rocket to receive wrong data.
At the same time, having added big uppercase warnings in the Ariane 4 source code and architecture docs, might have prevented this.
So, important, in safety critical code, to assume that others might blindly copy paste in bad ways -- and then try to warn them, although you might not be there any longer
The new one did not have these interlocks, instead doing everything in software. The result of this was a few people being fatally irradiated when a certain race condition was triggered.
I think a better approach (and one which NASA uses from what I've read) is to only use static memory.