Links converting to plain text
The t function's first argument is a string, and the second is a keyed array of arguments (search => replace).

The string your passing in is:

token_replace(variable_get('listing_edit_free_activated_page', 'Your free content has been activated. Thanks!'))


And the replacement your searching for it @link.

As the string @link does not appear in the string your passing in no replacements are made.

Here is an example where a replacement will be made:

$text = t("@name's blog", array('@name' =&gt; format_username($account)));