Legally, in the UK there isn't a difference. An unwritten verbal agreement still counts as a binding contract under UK law.
Of course, it will be harder to enforce in the event one party to that verbal contract reneges as it becomes more difficult to prove the contract existed.
It has enough logic in it to be plausible. I agree it's probably wrong, but I can see where the numbers have been added up and it would explain some of the apparently conflicting stories we've seen in recent days.
As long as it's done above board, I see nothing ethically wrong with it. Any team with a decent Academy system is essentially trying to churn out players that they can make a profit on, given so few of them actually make the 1st team squad for the club they grow up with.
But yes - it's a risky...
They're only stuck from a UK / Premier League perspective. Tau is still playing in Europe (and having made a name for himself at the level he was at last season, will probably be much easier to loan to a higher level league for next season if necessary, which will then - if he's as good as hoped...