could clubs in theory work around this by terminating a contract leaving them to be a free agent?
Clubs could, but we can't.
There would be a new rule around the 'spirit' of the regulations. Remember when all our goalkeepers died and we weren't allowed to make an emergency signin? Left us with only Jens Lehman or Bob Wilson as options.... Bob wasn't interested.
could clubs in theory work around this by terminating a contract leaving them to be a free agent?
I think someone tried this a few years ago and Uefa/Fifa blocked it. I suppose it may be different with the US as it close season but I think the FA would also be unhappy if they tried it. Michael Oliver would probably send him off on the plane over