Not a dumb question at all. It happens. Others can explain better, but bottom line - the NLI is a only a one year commitment (except for P5 conferences which technically are a 4 year commitment). For the vast majority of programs, an athlete can be "cut" or his athletic scholarship reduced or eliminated after the first year. For the P5 programs, if the HC does not want a player he will make it tough on the player and let the player know that he won't see the field next season, and often the player accordingly will want to transfer. The player could tough it out, but it most likely would not be the best experience for him and you only have so much eligibility.
It seems that most mid-major and lower and DII programs give the players a fair shake and don't pull athletic $$ as long as the player is working hard, keeping grades up, and doing his job. From what I've read on this board, it appears that the P5 conference teams can be more mercenary, however. Those programs generate $, the HC is expected to win, and if he wants to cut a player to make room for a more desired player, he'll exert pressure so the undesired player leaves "voluntarily".