Most international players aren't free agents. In most countries other than the US, players are rarely traded, and most of the better players don't ever make it to free agency. When a player changes teams, the teams agree to a transfer fee (cost to buy player's contract/negotiating rights), and then the new team has to agree to terms with the player. This is what happened with Matsuzaka, and that's just the way things work overseas. Like you said, he wouldn't have been released to enter a draft, and he probably wouldn't have been released without a substantial transfer fee.