"Retirement"

Hello,

"No paid or unpaid employment while staying in Sri Lanka"  This can be interpreted in many ways.
I personally think this term is mostly all about following.

Keep foreigners out of Sri Lankan labor market and organized activism

and not allow them to involve in any kind of direct political engagements or organized activism in any where while staying in SL.

and also not allow them to become tax evaders.   

As long as you can keep your freelance activity to a maximum level of hobby tax category according to the income tax rules of the country you are a citizen of,  you don't break any laws, and hopefully also not the term above since the definitions of the words employment and hobby activity are two different things. 

On the other hand Sri Lankans are flexible people and also respectful to elders by culture, so if they find out your freelance activity as a problem they will inform you not to do it anymore to begin with, since this is only one out of all the terms and conditions and not a law paragraph.

I hope you will have a wonderful retirement in SL.