"You may not bid on a player that you have released for a period of 30 days. After that period, if you resign a player, their original contract is restored, however, if the total value of the bid is larger than the previous contract, the difference will be converted to a signing bonus (to take effect after the 2022 season)"
There's no question the winning bid is legit. It's a matter of whether or not there is a time limit and what, if any,additional cost there would be.
I had this invoked on me once but I swear I don't remember the circumstances. I do remember that the original contract was restored.
Cris and the RC are discussing it