I think it depends really.
I used to keep rabbits for many years who were in hutches, but had turns running around. They were all desexed, flea treated, bonded to partners and had very large enclosures. They all lived inside when it was cold. Their nails were clipped and they were fed decent food and good hay.
In contrast, my MIl has a free-range rabbit. He has fleas, mange, she's never checked his teeth or trimmed his nails, and his bottom is so caked in poo and clumped up fur that he's like he has another rabbit stuck to his back. He eats bananas and carrots and apples all day and no good food. That is so bad for rabbits! Is like us eating lollies and biscuits from dawn to dusk.
So no, I don't think I was ever cruel to my rabbits. They spend a lot of time underground in warrens in nature anyway, being a prey animal they wouldn't just be bounding around in broad daylight all day long.
We had a huuuge yard/garden that I made safe and they ALL got time to run around to their hearts content. I couldn't just leave them all out all the time as being in bonded pairs or groups, they would fight with other pairs or groups.
And you CAN tell when a rabbit is happy, relaxed and enjoying life for sure! They binky, which is when they throw themselves into the air, twist their heads and kick their legs out to the side. My rabbits had heaps of love from humans and other rabbits, they would lie on their backs showing me their tummies (which showed they trusted me), would sleep snuggled up to me on my bed, and would groom me and run their chins on me (marking territory).
I mainly housed them in large bird aviaries, laid down on the largest side. So my Netherland dwarf pair (they were 1.2kg tiny rabbits) had a hutch that measured 2.5 x 2.5 x 1 metre tall. That was for night time.
There were some pet rabbits someone released on that street who got run over and kept breeding and I rescued a few of them.
Rabbits are not the dumb, cuddly boring animals one is led to believe.
I also had a totally free range bunny when I lived with my MIL, he was gorgeous, his name was Ben. He dug under a fence and a dog ate him