Maybe I am wrong -- at one point I thought the goal was to preserve the best players, per nation, so that the FA number was adjusted depending on the maturity of the league. So I "catalogued" this concept in my head and haven't thought about it much since.
However, given that I haven't seen too many free agents recently it is likely that I am incorrect and you are right.
The original idea was to regulate the market because there were so few skilled players. The original threshold was so low that it was picking up players that had no training (a player assigned to a new owner who never logged in would become a FA in 5 weeks). And then when another owner was assigned to the team, BB might generate another player of the same skill level. In effect it was saving the best player on each team, and then also generating a replacement.
This soon collapsed the market. I didn't have supporter at the time, and was using a $1000 bid to bookmark player, and ended up with some older players. They then raised the threshold so it was only catching trained players, and some very exceptional untrained players (mainly centers). But it may have been above the salary level of the NT players in smaller countries. So to avoid the loss of NT players, they were also made FA. This gave an appearance of a different threshold for different countries - but it really meant that for some countries, a salary of $5000 would mean you were among the top 15 players for that country.