If you shouldn't swaddle an infant past 1 month, what bedding should be used?

They say you shouldn't swaddle a baby past a month because it might inhibit their development. But I thought you aren't supposed to use covers for an infant either. So what should be used, blanket sleepers only, or keeping a room warmly heated? From my daughters birth i have swaddled her, sometimes loosely, and keep her hands free because she prefers that.