Yes, they are supposed to be loose.
1st. & 2nd. Generation Colts were fixed.
3rd. gen Colts are loose and lightly spring-loaded "up".
The thing is, the fixed firing pin hammers on the older guns had to be exactly fitted to align perfectly with the FP hole in the recoil plate in the breach face.
The loose FP's don't have to fit so good because they can move to self-align with the hole.
Thus, they are cheaper to make, and cheaper to fit to the gun.
rc