In a 'free&movable' model, the slices move with the water table elevation. As the boundary conditions are located on slices, they will move together with them. So a well might even move deeper with higher drawdown. It is not automatically turned off when the water level falls below the (initial) bottom of the well.
To limit well extraction by a minimum level, there are two possibilities:
1. You can use a 'minimum head' constraint on the well. That will turn the well bc into a fixed head bc when the pumping would lead to a water level below the minimum head (well bottom). This option works well as long as the water level does only drop caused by pumping in the well. If external effects can also lead to a water level below the well location, you should prefer the second option. Using a 'minimum head' constraint in this case could lead to infiltration at the well due to the changed boundary condition.
2. Instead of the well bc, you can set a head bc with the minimum head (well bottom) as the value. The boundary flow at this head bc then has to be constrained by a 'min flux' of 0 and a 'max flux' of the pumping rate. In this case, the original pumping rate will be applied (well bc) as long as the water table is much above the well bottom. At a water level slightly above the bottom, a head bc will be applied, leading to less pumping. At a water table below the bottom, the boundary condition will be turned off (well bc with value 0).