SalesOrderBeforeSaveObserver.php

<?php
/**
 * Copyright © Magento, Inc. All rights reserved.
 * See COPYING.txt for license details.
 */

namespace Magento\Payment\Observer;

use Magento\Framework\Event\ObserverInterface;

/**
 * Verify order payment observer
 */
class SalesOrderBeforeSaveObserver implements ObserverInterface
{
    /**
     * Set forced canCreditmemo flag
     *
     * @param \Magento\Framework\Event\Observer $observer
     * @return $this
     * @throws \Magento\Framework\Exception\LocalizedException in case order has no payment specified.
     */
    public function execute(\Magento\Framework\Event\Observer $observer)
    {
        /** @var \Magento\Sales\Model\Order $order */
        $order = $observer->getEvent()->getOrder();

        if (!$order->getPayment()) {
            throw new \Magento\Framework\Exception\LocalizedException(
                __('Please provide payment for the order.')
            );
        }

        if ($order->getPayment()->getMethodInstance()->getCode() != 'free') {
            return $this;
        }

        if ($order->canUnhold()) {
            return $this;
        }

        if ($order->isCanceled() || $order->getState() == \Magento\Sales\Model\Order::STATE_CLOSED) {
            return $this;
        }
        /**
         * Allow forced creditmemo just in case if it wasn't defined before
         */
        if (!$order->hasForcedCanCreditmemo()) {
            $order->setForcedCanCreditmemo(true);
        }

        return $this;
    }
}