babcock making 5 times more than dubas would have nothing to do with whether or not he was qualified to make a decision on something that affects player health, cap, cba, etc...
if that player that beat Holl out was waiver exempt, and Holl was likely to get claimed if waived at his salary, and there wasn't a fair deal to be made to move Holl or if it just didn't make sense to move them and lose the RD depth, then absolutely you tell Babcock that he'll have to use Holl. this is 100% the job that a GM has to do, and no question that would be the right thing to do in this situation. and Babcock would likely understand that the gm has to make tough choices sometimes, but probably also doesn't want to lose depth for nothing.