It was an untimely and terrible injury for Thompson as he was ready to hit the free agent market for the first time in his NFL career. Thompson received minimal attention on the market, getting one workout with the Seahawks, which likely wasn’t much of a workout at all due to his injury.
Knowing he was likely to miss at least six weeks at the start of the season, if not the full year, the Bengals opted to re-sign Thompson, allowing him to spend the year rehabbing and working with the Bengals’ doctors and trainers.
Thompson was placed on the Physically Unable to Perform (PUP) list to start the year, as expected. And when the deadline came to remove him from that list to give him a chance to work out with the team on a roster exemption, the team allowed him to do that. He never really took part in practice, and was mostly just working on the rehab field. Then, when the deadline came to place him on the roster, cut him, or send him to season-ending Injured Reserve (IR), the Bengals chose IR, ending Thompson’s season before it began.
Per Spotrac, in 2016, Thompson signed a 1 year, $840,000 contract with the Bengals. Over the Cap has different numbers, including money he’s owed in 2017. According to OTC, Thompson made $760,000 in 2016 and will make $775,000 in 2017. If he's cut before June 1, the Bengals wouldn't be on the hook for any dead cap money, but if he's cut after June 1, they'd be responsible for paying him his $645,000 cap hit this season.
So, it appears Thompson won’t actually be a free agent in 2017 and that he’s going to be on the Bengals’ roster in 2017, too, assuming he’s not cut.
Since Thompson wasn't activated, his one-year contract was tolled to 2017. This isn't always the case with players who aren't activated off an injured list, but in his specific case now Thompson's one-year deal signed for 2016 will roll over and be the exact same for next year. He's no longer viewed as a free agent.
Spotrac and Over The Cap both don’t seem to completely have the facts straight on his contract details, but, at a minimum, it seems Thompson will not be a free agent in 2017 and will be on the Bengals’ roster heading into the season.