Too add to what you said, Offset language stops the Team from paying you while another team is paying you. So if Wilson were to be cut with 4 million remaining on his deal, then he signs a new deal with another team for 1 million, The Jets would only owe him 3 Million while the new team would owe him 1. It's a way for the team to protect themselves financially, but I honestly don't blame Wilson at all.
Someone did the math and the likelihood of Wilson being cut year 4 just for poor performance/off field issues would have the team still on the hook for pennies on the dollar of the overall contract.
If you think you have a franchise QB, you don't leave offset language in the contract. They are being incredibly stupid and stubborn and showing everyone why the Jets have sucked so much for so long.
Wilson holds the leverage here.