The reason that the CBA allows player to block like this is because, in some weird way, George would lose Bird rights entering free agency. So, sign and trades would no longer be an option. That limits his abilities to move during free agency. So, it makes sense for Devean George to reject this trade. Its bad enough going to NJ. He cannot be expected to sacrifice potential salary just so his former team has a better shot at a le.
I do not see this deal going through unless they find a way to make it worth Devean George's while financially.