Well, what else are they going to do?
They can't trade him right now; every other team passed on signing him as a free agenct, and I don't think they're allowed to trade him until December 15th.
If they release him, they have to pay him the full $3M. No one will pick him up on waivers.
They could suspend him for "conduct detrimental to the team," but that burns all remaining bridges and sets up a big legal fight.
Still can't believe Larry Brown didn't reach out to this clown over the summer. The ONE team where Iverson makes sense is the Bobcats. He'd start, he'd dominate the ball but BFD since they don't have anyone else who can score anyway.