I don't know all the details, but clearly Chris Williams would prefer to not play his option year with the Cats in 2013 and try his luck in the CFL. Obviously he's under contract, so the options are sitting out or playing for the Cats. An issue is that he is under a beginning deal, so his pay is minimal. One problem with paying imports such little money initially is that they aren't really losing out on a lot by sitting out.
As far as I understand if the the Cats and Williams redid his deal, it would have to extend to next year, which is probably unpalatable to Williams. The Cats would certainly miss Williams, although as I have kept repeating in this off-season, they were in last place even with him. My guess is that Williams comes back and plays this season grudgingly, although I could see him saying screw it, why play and have the chance of being injured and complicate his NFL bid in 2014. He would be a free agent so even if he didn't make the NFL he could sign a lucrative free agent contract with another CFL club.