I didn't realize a major league baseball team can wait until arbitration and then just release the player instead of honoring the arbitrator's decision

That's what the Giants did, essentially sending the message to other players that if they don't take a lowball offer, an arbitration win will be pyrrhic:

“I can’t speak for everybody, but I know there’s a lot of blowback,” he said. “There was definitely some concern amongst some (pre-arbitration and arbitration eligible) players, like, ‘What if this happens to me?’ If one team does this after going to arbitration then it turns into 70% of teams, what’s to stop teams from just making the lowest possible offer knowing no one will take them to arbitration? That bothers me for future players in this situation.”