I can kind of see it. But really it's just an extra 'franchise tag lite' available. It's still a very hefty sum for that 5th year.
A team is going to come out ahead by simply extending that same rookie after year three. Rather than forcing them to stay and then coercing them another year with a franchise designation.
I can see the rosterbation theory behind it. But I think it breaks down in it's execution. I actually think it makes more sense for non QB players, as the league averages for those positions is going to be ridiculously lower than market value.
Getting a 2nd round quality player in the first round still only gets you a 2nd round quality talent. Those guys aren't typically your starter guys anyway. Who is going to want to spend 12 million a season on a backup?
Let's put it in motion. Denver picked Brock Osweiler to be their QBOTF after getting Peyton Manning. Now of course it's still early -- but after year 4, what's the likelihood that he's going to be worth that 12m/yr option? Probably not very high. Whereas if the team likes him, but doesn't LOVE him, they can extend him for up front money and a cheap cap friendly back end after just 3 seasons.
For a 2nd round quality QB, the latter is much more likely than the former. Except that team has now just spent a 1st round pick on that same backup 'meh' QB and lost out on a bona fide 1st round starter quality guy elsewhere for the team.
I think Rang was overthinking this. Once I applied the idea to real case scenarios, I'm left with thinking this is generally a very bad idea. Not even considering the wasted draft value aspect either.