When a recruit signs a NLI (National Letter of Intent), it is a one year contract between the recruit and the school. There is no "escape clause" for the school, so they are obligated to retain the recruit for 1 year.
Not being able to release a walk-on should be considered a bug. My assumption is they (EA) considers that player a preferred walk-on (they have a place on the team, just without a scholarship) rather than a true walk-on (have to try out for the team after enrolling in school). Typically a preferred walk-on will not get cut, but there is no legal restriction preventing that. The team has 35 non-scholarship roster spots (85 scholarships, 120 roster limit), which makes it unlikely a preferred walk-on will get cut.