accepting whatever price the free producers settle on
This is not how price discovery works. You need both buyers and sellers in order to get an equilibrium price. And you're contradicting yourself - if the T3 prices are going to zero, it is not exactly that "free" producers benefit from cornering the market with exorbitant prices. They need an outlet to offload their excess T3, otherwise it is wasted.
And yes, T3 set producers are special - their T3 production is more efficient, and yes, T3 production via other means can (in theory) vanish. This happens in the real world all the time - marginal efficiency producers are squeezed out of the market. It does not, however, means that inefficient T3 producers cannot play the game, or are even hurt by that. The beauty of trade is that all you need is
comparative advantage in order for
both parties to benefit. You don't need absolute advantages.
This means that in theory T3 set producers will only produce T3s (they have a comparative advantage there), and all others will produce T1/T2 (they have comparative advantage there), and both camps would trade to the
mutual benefit.
This is not particularly different from boosted goods situation within the same tier. You can produce all the goods you need by yourself. Some cities - especially early ones, but there are some later ones as well - do just that. It would just happen to be very inefficient.
If you're boosted in marble, and your neighbor is boosted in steel you may complain that his steel production is up to 8 times (!) more efficient that yours, and it is true. You may complain about this inequality. But the natural consequence of this "inequality" is that efficient cities just don't build non-boost goods - they build their boosts, and trade for rest. It is entirely possible to have this across tiers as well - some people can specialize in T3, others in T1/T2.
As I said, no absolute advantage is required, only comparative one.