I think he had the option to do a Besic, which involves reducing the risk of injury and waiting a few months to become a completely free agent. I don't agree that such actions would have made a top flight move impossible for Josh King. It may have been his last chance to sign for a club like Everton though, maybe.
If there really is no obligation to buy, he is taking a big risk. If he was to suffer a nasty injury, he wouldn't attract anyone at all, and a contract with a championship team would then become Nirvana in comparison to having no contract at all.
Fair play to him if he is taking such a risk. I don't think everyone would.