I think Harbaugh is out after this year only if he wants to leave/if an NFL team will have him.
Michigan desperately wants to win and he's definitely underachieved there, which sounds like a perfect recipe for a firing. However they are also at a spot where they are wondering "If Harbaugh can't turn us around, maybe nobody can" and are seriously questioning if they could get a better candidate.
Say Peyton got into coaching after his NFL career and had success at the FCS, Power 5, and NFL level. Then came to Tennessee to turn around our program, but 6 years in he still hadn't done it. That's where Michigan is right now with Harbaugh.