This is what I expect to happen. We can recruit and interview without terminating him. If Bob wants to start interviewing for jobs himself now, and wants his staff to be able to, tell him to take the January buyout number and he can start right now. Diaco is better of being let go sooner rather than later, so why wouldn't he do that?
Ehhh, debatable (Hey, look!! This is a message board. Let's debate!)
First off, that's a lot of money to leave on the table. If I were Diaco, and the University came with that offer, I'd hold them to every word of the contract. He is virtually unemployable as a head coach, and maybe even as a coordinator, for the next year, so it is nowhere near his interest to take that deal. I'd tell them if you fire me now, you pay me now.
Secondly, coaching is extremely fraternal. No one worth anything (especially if they are up and coming) is going to agree to interview for a job that is still filled, Unless it is an "Interim arrangement. They don't want to be labelled, "That guy."