I have to say I agree with OM, Porter, and Leo's assessment of the situation. I am very disappointed in how this turned out. I am still not familiar with all the contractual aspects of OOTP so I didn't think it would turn out this way. I think some discussion about how to handle this to reduce the negative effects on the league as much as possible is in order.
I suppose one option might be to re-work the FA rules and I load my backup copy of the league and start FA over again. Just popped into my head as I was typing this, but it's all open for debate.