Yep. The worst thing he can do for his situation is hold out. There's absolutely no benefit to that.
Not what I expect to happen, but the one way that a holdout benefits Lamar is a "rising tide raises all boats" sort of way. If Burrow, Hurts and Herbert all get full guarantees and maybe even extensions for Mahomes or anyone else close to being due that locks on massive guaranteed dollars, then Watson's deal can no longer be considered an outlier by anybody and maye Lamar finds the number he wants at that point. Also the cap continues to go up, so the same APY is a lower percentage.
Doesn't seem remotely likely to me that happens, but the embargo against Lamar, if it exists, would be lifted in that case and then teams just decide if he personally is worth that deal after a year on the bench.