He can only sign an ATO and he has to go back to the OHL next year. He's allowed to play because his season in Guelph is over.
Well he can sign an entry level contract as well at any point, and almost certainly will before the next season starts.
But next year he can only be in the NHL or in Juniors, and almost certainly Juniors
And to answer the initial question was it expected, yes. the vast majority of Juniors who are draft picks find their way to the AHL at the end of their season assuming their season ends before the AHL season ends