To me every reading should be narrated. If we read as a family then they never know who will be asked to narrate. It can seem overwhelming to figure out how to have every child narrate every reading. But, remember that the older ones should be doing written narrations also. So choose a book that will be for written narration and have them give their written turned in by end of week.
Free reading is just that…free. No narration is asked for but if it is given dont stop them. I also do not normally have them read their free reading to me.
As for literature. My oldest has a literature book he is required to read on his own and narrate. Then we have a family read aloud literature book that the whole family narrates from.
HTH!!