A little maybe. Here's my angle. $4 million with incentives is what the Dodgers gave him for 2020 (pre-virus). They're going to add Price to Kershaw and Buehler at the top of their rotation with Urias, May, and Gonsolin ready to step into it already, Josiah Gray marinating in Oklahoma City AND the free-agent market flooded with RPs that will allow them to substantially upgrade their pen, if AA offers Wood that security before Thanksgiving Friedman may just decide it's better to keep that $4 million to spend on a bargain RP. There's probably not a better fit for Brad Hand than the Dodgers, and if he gets a 1 or 2 year deal at ~ $8 million AAV you just paid 50% of his 2021 salary by letting Wood walk.
Wood puts the security of already having been signed in what will be a crazy market, the opportunity to be a really important piece of a legitimate contender, and the added bonus of coming home into his "figuring computer" and signs without bothering to test the market further. Even if it's a slight overpay, it's still a great deal for AA because it allows him the opportunity to bring Melancon (or another back-end arm) in to maintain his dominant pen while leaving him the majority of the available funds to figure out LF and/or 3B.