Explain this to me like I'm 5. I thought he had a club option next year and then we have his RFA rights, which we can obviously spend whatever we want to resign him or match?
So Edwards is in a strange situation. His first season he was on a two-way that eventually got converted to a remainder-of-season full NBA deal. This offseason, he signed a deal for one year plus the team option. This means that:
1) He is on a 1-year deal (the option doesn't count)
2) The Nets would have Early Bird rights if he finished the season with them
The NBA was apparently concerned that teams would sign players to one-year deals to get Early Bird rights (or Full Bird rights) and then trade the player to a team eager to have those EB/FB rights. So under the circumstances listed above, the NBA strips "Bird service time" to prevent teams from "sneaking into" Bird rights without a two-year deal. Because the Bird service is stripped, the player has to agree to the trade.
Edwards will be eligible to be an RFA at the end of his contract (this year or next) by virtue of having <=3 years of NBA service time. But if we extend the QO, we still have to have a salary cap exception to match any offer sheet, or to sign him outright. The Gilbert Arenas clause guarantees that any offer sheet's first year can't exceed the MLE, so we would always have
some option to resign him (though at this point such a large offer seems unlikely). Note that you cannot "spend whatever you want" to sign/match an RFA - you have to have an exception. Usually we think of RFAs as players coming off of their rookie deals (four years without changing teams as a free agent, so Full Bird Rights), but for second rounders this often isn't the case and they don't have Full Bird. But you have to use
some sort of exception to make the signing.
For example:
If we DON'T pick up Edwards' option, we will have "Non-Bird" rights on him, which means we can sign him starting up to 120% of his previous salary or the QO (whichever is greater), <= 4 years, 105% max raises
If we DO pick up Edwards' option, we will have Early Bird rights at the end of his deal, which means we can sign him starting up to 105% of the average salary (this would be much more than the other EB criterion, 175% of his last year's salary), 2-4 years, 108% max raises
So really what Edwards gave up in consenting to the trade, wasn't the ability to be offered ~$10M by the Nets this summer (they wouldn't do that due to the team option at a much lower salary) but rather up to a max salary two summers from now. But since that seems really unlikely to happen, in essence he's giving up...nothing.