He's not a free agent. He's on a non-guaranteed contract.
Meaning the Spurs can cut him anytime and owe him nothing. They can keep him as long as they want and pay him on a per game basis up until January. If they want to keep him after that, they have to guarantee him the rest of the season (if not, they have to release him).
My friend Noel Felix is in the same situation with the Sonics.

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