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I think the new rule should be old contract + new contract. When you release a player you are in essence voiding the contract, yet still owe the player money. When signing them to a new contract, new terms must be applied.
If the current rule allows a team to cut a player pre-deadline, then re-sign them and cut them again post deadline to save even more, then that is definitely bogus. In my opinion, this would certainly have been 'implied' in the rules, and needs to be explicitly included. While I'd encourage counter arguments, at this point I personally would be against allowing this for this season, since this seems to be a clear case of exploiting the rules rather than misunderstanding them, especially for an RC member...I would bag the current 're-instates contract' rule which is not realistic, and say you cut the player and the dead money is permanent, then after a certain grace period - say 60 days, but this can certainly be debated - you can try to resign the player following standard rules.
I suggest that the rule next year be "Cap hits plus new contract" since the team is only on the hook for the cap hits, not the entire old contract after releasing him.