The thing is, this exact thing has happened to countless imports before. It's not something new that the Kings have done with Thalo, he's just the first to fight it, probably because he's gone from the NBL to the ABA, not NBL to Europe or whatever. He's got the time in the country and the (lack) of money.
I think there'll be a tonne of pressure from other clubs, the NBL, and yes even other sports codes for the Kings to settle it. It could get real ugly for ALL NBL teams if they have to start paying out imports FULL contracts (could be as high as a $350,000 payment).
Whether or not any payout would fall under the cap, I don't think it will have any effect on the Kings. They sacked a player and replaced him. All okayed by the NBL. They haven't gained any advantage. They're getting sued. I don't think a single club would complain either.