I'm not sure where they are getting their numbers unless they are for some reason counting his 2012 season (now) which wouldn't matter since this season would be over if we cut him in the off-season.
I don't have access to roster bonuses or player incentives but nothing I can find shows Free has hit any of those yet.
By my math, cutting him this off-season would create an accelerated signing bonus hit of $8,350,0000. This is dead money. Not an additional penny goes to Doug Free.
His 2013 salary cap hit if he is on the team would be $11,175,000. So cutting him would create (11,175,000-8,350,000) $2,825,000 in additional cap room. Yes, it's dead money but again, you aren't paying additional salary to money to a player who is underperforming. Also, keeping him means Jerry writes out a check for $7,000,000 to Doug Free, his 2013 base salary.
So, your choices are:
keeping an awful Doug Free, taking a $11.175M cap hit for him, and paying him $7M in real money
OR
releasing him, take a (dead money) cap hit of $8.35M, freeing up an additional $2.825M in room, and not paying him another dime.