The headline that Dubas is effectively on probation now seems to me to be exactly correct.
Just the fact that he is not being offered an extension is now out in public is big news. Normally, that would stay behind closed doors.
It really puts Dubas in a bad spot. If he passes the test, he would be a hot commodity elsewhere and might be inclined to flip the bird at the Leafs and go to another destination with better job security.
If he fails the test, it will be time for him to regroup and start over.
Coaches and GMs are hired to be fired. Being let go with some term left on a contract is one of perq's of sports management. There's no cap consequences to firing a coach or GM, and MLSE can easily afford to carry some terminated contracts.
The fact that the Leafs are not stabilizing Dubas' position with a new contract that might be terminated early suggests to me that Shanahan is also under pressure from ownership, and that he too is on notice that he might be dismissed if and when Dubas is let go -- at the end of this season or otherwise.
Whether or not the Leafs intend to dismiss Dubas at the end of this season -- or sooner -- having him hanging in a lame-duck position is bad news for the Leafs. Extending him wouldn't stop them from firing him anyway, and not extending him sure doesn't help stabilize the organization.