I know it's heresy to say anything good about Butch now here on these boards, but you're right, he's a great fit for that level of job. He actually won 4 mid-major conference titles in 6 years at Central Michigan/Cincinnati. Only lost 3 conference games in 3 years at Central Michigan. Yes, I know he followed Brian Kelly, but if he was merely coattail riding then his 3rd year team wouldn't have gone 11-2 (8-0) and finish the season ranked. He would have played that season predominantly with guys he recruited. Butch is a good recruiter on paper, and given the wider talent differentials between the haves and have-nots in the mid-majors he can have good teams purely on account that he's got more talented players. That fact masks his in-game coaching and talent development deficiencies.
Butch's contract didn't say he had to actually secure comparable employment, rather make a "good faith effort" to obtain it. You can't force him to accept a job. From a legal perspective, that kind of language requires the coach make an honest effort to get his name out there/land some interviews, which he reportedly has done. Does Butch want a comparable job at the moment? I think the answer to that is absolutely not, but he doesn't actually have to take another job.
If UT doesn't think he made a good faith effort to obtain a comparable job, they could claim breach of contract and not pay the buyout, but then Butch would likely sue them. The legal expenses involved probably make it not worth it. Supposedly Butch actually turned down the Oregon St job a couple years ago, right after he was fired from Tennessee. If you were offered a comparable job by someone else and willingly turned it down, I suppose UT could argue he didn't make a good faith effort to secure it. However, Butch could argue he did make a good faith effort to secure it (by virtue of throwing his name in the hat for it, interviewing, etc.), but simply decided he didn't want it. Butch would probably win such a case.