My guess is the Jets didn't want to give him a big bump in salary and so the short term contract. Also, the 1 year deal means when this contract is up, he has arbitration rights.
Dano's camp isn't going to sign long term at that price, so the compromise I think is on the term. If they don't think what is being offered is fair next year, they can go to arbitration. They didn't have much leverage at all on this contract.
I don't think this affects expansion draft at all. He is still an RFA at the end of this deal, I don't think the possibility of arbitration would "scare" Vegas from picking him if they were interested.