That deal for WItt seems to suck for the club, not gonna lie. It's 7/148 before the first opt out, so if he performs well they're only buying out 3 years of FA at 100 million. There's minimal downside risk for Witt because of the annual opt-outs, and 4/140 of additional downside risk for the club. If he went to FA in on schedule he'd sign what, 9/400? Maybe 9/450? He delays it a couple years and signs 7/300 instead if he performs well, and doesn't opt out if the market isn't looking good. Maybe if Witt continues to be a 6 win player through his age 29 season the Royals get some decent surplus value out of him, but that's it. He'd have to turn into an absolute monster, perennial MVP type guy for this deal to really have upside for the Royals, and I'm not sure if his career-to-date supports even sniffing that sort of projection.
He won ROY at 22 and then top-10 MVP at 23. I think he's got the resume.
I do think your point about the Royals not getting much of a discount is apt. They are taking on most of the risk and Witt can still get out. There is a pretty narrow bandwidth for it to be a successful deal AND for Witt to still be under contract in years 8, 9 or 10. But you can always renegotiate if the deal is working but the player looks poised to opt out, similar to what Manny did. And even if he does opt out, they still win. They get three prime years they otherwise wouldn't have at below market rates.
I'd be happy to give a similar deal to Henderson (one year extra to match the service). I'd take on the back-end risk to be locking in 3 FA years. 3/$100M like you point out feels big now, but in 5 years that might not be a top-20 AAV among position players. Inflation is very high in MLB contracts.