It does indeed free the handle to the pool. As Ben points out, though, you're not running out of handles, you're running into the AOLserver restriction that rejects a gethandle on a pool when you already own one. He's done a great job of explaining why the restriction exists, so I won't add to it.
That's the meaning of the error message.
If you need more than one handle from a pool, use a single gethandle to allocate all of them at once.
