Remove free method, call finalizers in C API

lib/c-api/src/wasm_c_api/instance.rs

@@ -49,6 +49,12 @@ pub unsafe extern "C" fn wasm_instance_new(
 
             return None;
         }
+
+        Err(InstantiationError::HostEnvInitialization(error)) => {
+            crate::error::update_last_error(error);
+
+            return None;
+        }
     };
 
     Some(Box::new(wasm_instance_t { inner: instance }))