I don't like Benji, but I see no obvious downside in having him back in the game, and for a lot of people (and partic some kids) there's a clear benefit. As long as whatever salary cap decision they make is available to any club who wants to sign him, I say go for it. If nothing else it'll be a good laugh.
And re the contracts stuff.....contracts in every sphere of business often do not run to their initially agreed term...there's nothing particularly different here. Sometimes clubs stand their ground, and sometimes they figure they're better off without a player who doesn't want to be there. The vast majority of contracts either run their term, or are terminated by mutual agreement with no great controversy.