1. If the player declines the mutual option you get a compensation pick. If you decline the option then you do not get a pick.
2. If you have zero ADV then your projected ratings once you sign the player are horribly inaccurate, so your 20 in HS pre-signing projections are more accurate. However, even with 20 in HS a fraction of your prospects, 15% the one time I actually looked at it, will WAY underperform your HS projections. So yes, his drop in projected OVR is due to your zero ADV-- but he also has a chance of not getting anywhere near his pre-draft projections.