In Goresky, Kottwitz and MacPherson's classic paper, they give the following example of a space whose equivariant cohomology is not free as an $H^*(BS^1)$-module:
Let $K = S^1$ act on $\mathbb{CP}^1 \cong S^2$ by rotation with fixed points at the North and South poles. Let $X$ be three copies of $\mathbb{CP}^1$ joined at these fixed points so as to form a “ring”. Then $X$ is a projective algebraic variety but the equivariant cohomology $H^*_K(X)$ is not a free module, and the restriction map $\gamma$ (of (6.3.1)) fails to be an injection.
I want to compute the $S^1$-equivariant cohomology of $X$:
I would like to use the Mayer-Vietoris sequence. So I decompose the space $X$ into $A$ and $B$ as follows,
which gives me the following pieces,
The Mayer-Vietoris sequence then looks like: $$ \cdots \to H^*_{S^1}(X) \to H^*_{S^1}(A)\oplus H^*_{S^1}(B) \to H^*_{S^1}(A\cap B) \to \cdots $$ Clearly, both $A$ and $B$ equivariantly deformation retract to $S^2$ whose $S^1$-equivariant cohomology is given by pairs of polynomials which have the same constant coefficient (I only care about the $H^*(BS^1)$-module structure, not the product structure). And, $A\cap B$ is a disjoint union of a point and a circle (on which $S^1$ acts freely). So, $$ H^*_{S^1}(A) = \{(f, g) \in k[t]^2 : f(0) = g(0)\} $$ $$ H^*_{S^1}(B) = \{(h, i) \in k[t]^2 : h(0) = i(0)\} $$ $$ H^*_{S^1}(A \cap B) = H^*_{S^1}(\{\text{pt}\} \sqcup S^1) = k[t] \oplus k $$ (Note that I am working with coefficients in a field $k$.)
The inclusion induced map $H^*_{S^1}(A) \to H^*_{S^1}(A \cap B)$, is $(f, g)\mapsto (f, g(0))$. So the map in the Mayer-Vietoris sequence, $$ H^*_{S^1}(A)\oplus H^*_{S^1}(B) \to H^*_{S^1}(A\cap B) $$ is, $$ (f, g, h, i) \mapsto (f - h, g(0) - i(0)). $$ Clearly, this map is surjective, so the Mayer-Vietoris sequence splits into short exact sequences: $$0 \to H^*_{S^1}(X) \to H^*_{S^1}(A)\oplus H^*_{S^1}(B) \to H^*_{S^1}(A\cap B) \to 0 $$ So, $H^*_{S^1}(X)$ is the kernel of the map described above, which is, $$ \{((f, g), (h, i)) \in k[t]^2 \oplus k[t]^2 : f(0) = g(0), h(0) = i(0), f - h = 0, g(0) - i(0) = 0 \} $$ or equivalently $$ \{(f, g, i) \in k[t]^3 : f(0) = g(0) = i(0) \} $$ which does seem to be a free $H^*(BS^1) \cong k[t]$-module, and it indeed injects into the equivariant cohomology of the fixed point set which is $k[t]^3$.
Is there an error in my computation?