Thinking he wanted out as well, he was done coaching
My tinfoil hat conspiracy is that Chryst was going to retire at the end of the year and so Wisconsin “fired” him both as a favor to give him the buyout and to give Leonhard some time to adjust. But because it wasn’t an “actual firing” they negotiated a reduced buyout. The “proof” is that Christ’s dad died in his 50’s from a heart attack and apparently Chryst once said something about not coaching in his 60’s/late 60’s.
In terms of why he actually accepted a reduced buyout, I think the most likely reason is there was something in the buyout that they waived in exchange for less money (e.g. the buy-out would be reduced by future earnings he made as a coach).
It’s also possible it was done as a favor/my “conspiracy” above. Chryst was born in Madison and lived in Madison for several years growing up, his dad was a coach at Wisconsin, Chryst played at Wisconsin, he was a long-time coordinator here, and they have had a family cabin up north for years.
Finally, I guess it’s possible that there was a scandal brewing and if he didn’t accept the reduced buyout they would try to fire him for cause. But I don’t think there’s any way it’s this one. It’s theoretically possible but I doubt it.