Kerr is very clear. He wants PJ and does not expect him to be in the rotation. At the same time, I don't think he slammed KT, just that he was not worth $16 million to them. If the Suns can replace KT with PJ at small salary, then the team is financially better off and not that much worse off on the floor.
The real issue is the nature of the negotiations. Clearly PJ wants a lot more money than anybody has offered. He can go to any team he wants as long as he is willing to play for the vet minimum. My guess is that Suns are offering a little bit more because they really do need him. But they are not offering as much more as he wants.
From a public standpoing, Kerr has gone to great lengths to play down how much the Suns really need PJ. That's part of the negotiating tactic -much as PJ keeps telling everybody he wants to retire but doesn't.
This is routine negotiating tactics once it becomes clear there is not someone in the wings ready to make a big offer. IMHO, the process will not go forward as long as there is a chance that Dallas will give a $3 to $4 million offer. Once Dallas decides what it is doing, PJ's leverage will be reduced substantially.
We don't know if Kerr is any good at this game. But expecting him to tell us how he plans to play his hand seems a bit unrealistic.