The Grizz still had their mid level exception to use and they used it on KC. It’s a salary cap move and future roster construction move. What isn’t mentioned is that the final 3 years of his contract are actually for the league minimum.
Still a really good deal for him early and gives him some security, but also makes sense for the Grizz as they potentially lock up a solid role player (or more) for the league minimum when their other young guys start to get paid.
Additionally, I believe by signing him to at least a 3 year deal and keeping him, then the Grizzlies would retain KC's Bird rights when he becomes a free agent. They believe KC was better than him being a 38th pick.