When a tank on the ship’s centerline/elsewhere is not completely full of liquid, and the ship heels, the liquid in the tank moves across the tank in the same direction as the direction of heel. Because of this effect the COG of the ship moves away from the centerline, which reduces the righting lever ‘GZ’ & height of metacentre, which further increases the angle of heel. This effect is known as free surface effect.
This video explains how a ship encounters virtual loss of metacentric height because of partially filled tanks inside.

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