They hold onto his rights for a year after drafting him, after which Sanders would go back into the draft field allowing him to be redrafted (if the Titans didn’t trade those rights beforehand).
But, and it’s worth emphasizing, sitting out a year for rights to expire and get redrafted is very, very detrimental to how other teams’ view the player, who’s now having to work against not only the arguments of what they just did the previous year’s draft, but also having sat out of football entirely and not playing (or practicing with a professional team) for a whole year…it wouldn’t be a “oh he drops from a top 5 to a mid-to-late-first” kind of drop…it would be a “drops from top 5 to end of Day 2/Day 3” kind of decision.
But it’s also all a moot point. He’s more than likely going to end up in New York (they’re most likely not beating Indianapolis this week while the Colts still have a shot at the playoffs, and their last game is against the Eagles who are more than likely to still very much be in play for the NFC’s 1 seed come the final game of the year).