If not, they will release him. In the best-case scenario, Karl pitches well enough to make the team, earns a spot in the rotation and continues to do well. Several players including Karl pitch well, forcing general manager Kevin Towers' hand. Towers is a big believer in growing your own talent, so that would not bode well for Karl. I have been around long enough where I have seen that it doesn't always work that way.
Teams have an agenda.
You know what, they are the boss. It's their team. They run it however they want to. I don't begrudge them. Hopefully, the spring of doubt will turn into a good marriage between Karl and the Padres.