As long as Milroe is showing potential and improvement then he's worth keeping as a cheap risk/reward option. The issue is that it is difficult to keep multiple projects on the 53-man roster. At this point he's worth less than he was a year ago. Should he be cut he would probably be claimed by a team with weak talent/depth. My guess is that Milroe will be safe for 2026 and a decision will be made after preseason in 2027.
As a comparison Rams project QB Stetson Bennett looked terrible in 1st 2 preseasons and if the team had needed the active roster spot he might have been on the bubble. In his 3rd preseason he looked really good.
On the other hand Matt Corral, the Panthers pick #94 of the 2022 Draft, looked so awful in his rookie camp that cutting him as a rookie looked like a real possibility had he not gotten injured. He looked equally bad in 2023 and was cut early in camp. He was then picked up and released by the Patriots. He then sucked in the UFL. Sometimes patience is a virtue. Sometimes it's best to move on from someone who doesn't shape up. You can't keep everyone.