All players released during the season must first clear waivers before becoming free agents. The waiver process is similar to the free agency bidding process except it ends 72 hours after the player is released OR 24 hours before the first game of the week, whichever is longer. Any owner interested in a released player can start a bidding thread on the league message board. The owner releasing a player, however, is unable to bid on that player during the waiver process. If no bids are placed on a player that player is again designated a free agent, and the original owner can again acquire the player as a free agent.
Per the thread below, last year we did not allow moves after the cutdown deadline until week 1 waivers. We will do the same for 2014 but I want to hash this out next offseason and get it into the rules.
That may just be a product of players dropped during the season seldom being picked up. At least, not quickly enough to fall under the "waivers" clause. When a player is released on MFL, they're "locked" for a set amount of time (48 hours, maybe?), which is where waivers is designed to pick up the slack. Without waivers, if a team cuts someone to make room for a blind-bidding acquisition, then that player would never go through a bidding process, they'd go straight to FCFS once "locked" status went away.