Right - and the fact that it's only $20,000 is also pretty dumb and awful.
MLB dropping the draft down to 20 rounds to begin with (and now 5) is just another way for Manfred to start pushing his minor league cutting plan. There won't be enough draft rounds to fill out all the teams and those lower level teams owners will have to sell. MLB will probably say "hey we'll pay more for it than it's worth" and then dissolve the team, or place it into that Dream League they mentioned.
Basically he's going to get his way no matter what. It's awful.