I think his offensive regression is part being old as dirt, and part new offensive role. He's doing his best to get the others' going. He's largely up on the perimeter swinging the ball from one side to another. He's still a great passer, rebounder, and defender, and can still be called upon for a post-up from time to time. His regression, willingness to accept a diminished role, or being unable to fill another role -- whatever the cause, has enabled LMA to have a more seamless transition into this team.
Hard to say if he retires. If he still has the passion for the game, he'll find his role next year and be successful at it. Just like he's doing this year better than any other 39 year old has in NBA history.