The way the Gold Diggers set up Garoppolo's restructured contract is pretty clever. He gets a lot less guaranteed, but there are a lot of incentives that could push his compensation up as high as $16M. I don't think the Gold Diggers intend to use him this season. I still think they hope to get something for him in trade.
For now, Garoppolo is the most expensive backup in the league at $6.5M in fully guaranteed salary. However, the same people who provided the information about his contract also said that the team discussed with him the possibility of him waiving his no-trade clause in certain situations, and I believe they hope some other team will find itself in need of a QB and want to trade for him, and that he'll accept the trade because he'd rather start and set himself up for a bigger free-agent deal in 2023 than be an expensive backup.
If Garoppolo ends up starting for Santa Clara or any other team (after a trade), he could potentially make a good deal more than the fully guaranteed $6.5M, but still cost at most less than a third of top-QB money. For his compensation to get even that high, he'd probably need to start somewhere for the whole season, and he'd have to perform well. It seems pretty clear that he won't be a starter for the whole season in Santa Clara, because he hasn't been practicing with the team and those rumors that he didn't even have the playbook could be true. The Gold Diggers appear to really be going with Lance as their starter, and I expect Lance to get plenty of chances even if he's not good to start the season.
By lowering Garoppolo's guaranteed money to just over a quarter of what it had been, the Gold Diggers did two things simultaneously: they made it easier to keep him on the roster for the season if necessary, and they made him much more attractive to potential trade partners. A team trading for him will be responsible for whatever fraction of his fully guaranteed salary hasn't been paid by the Gold Diggers, and then any compensation beyond that will be based on playing time and performance. And if Garoppolo starts a lot of games for some team and performs well, that team will be thrilled to be paying him a per-game rate below the average for starting QBs.