Lee is negative value at that cap hit. Plus I doubt he'd waive so this is an offseason move when his trade protection softens
As you've noted, Lee's deal was always structured so that the commitment wanes after this year, and further the year after. (His cap will be 7M for 25-26, but cash will be 4.5M) Lee is one of those unusual hyper-social type-A guys everyone likes. With Matt Martin likely out of the picture after the season, I believe NYI will want to keep Lee for another year. If anyone can pull off the massively overpaid 4th liner gracefully & without causing resentment, it's him. Too hard to know what will happen after next season. IMO it's just as likely he'll end up LTI-retired as being shuttled elsewhere.
And, yeah, he's got negative value. And he's worth more to NYI than what they'd have to pay to ship him out. If NYI sell (as a NYI fan, they should), start with Nelson, and see if there's demand for anyone else they might not mind moving on from.