What's the rule on walk-ons? If you have three, the sim autosign one?

Supposedly.

Cause I just signed two scrubs, to get to 2.. but how does it work?

Honestly, it's random. I've seen plenty of teams have more than three walk-ons while others have the sim sign kids to get to three walk-ons. There doesn't seem to be any rhyme or reason to when the sim will sign kids to your team.

The sim is theoretically supposed to sign players to fill you (and SIM AI teams, for that matter) up to 9 scholarships, but since the way this was implemented was done poorly, it often fails to do so. From anecdotal observation, I have a theory that the higher the prestige for a team, the higher the bar for a recruit that it will allow that team to accept to fill the open roster spots, so the higher the likelihood of the sim not assigning scholarship players to fill the team up, but I have no solid evidence to back that up. There may be a preference for filling up human teams over Sim AI teams, though I'm not sure. Who knows.

So basically, I was better off not signing anyone and keeping my scholly next season. Anyways, I will waive one next season and let the other rot on the bench.