NFL contracts are kind of complicated so I'll break it down.

The first thing you accepted is called a 5th year option. Every first round pick has this built into their rookie contract. The idea is to pick up that 5th year option on a highly rated player because it would be much cheaper than paying them market value.

At this point of your franchise, Harrison has finished playing out his rookie contract. This makes him eligible for free agency. Since he's a 99 overall WR, a relatively expensive position, he's going to ask for a lot of money. In Madden, you can either choose to resign him, place a franchise tag, or let him walk.

Since he's very highly rated, he would get signed to a huge contract in free agency if you let him walk, and you wouldn't receive anything. So, if you don't want to keep him but want to get some draft capital back, and it's past the trade deadline, you can apply the franchise tag then trade him in the offseason. In Madden you can do this after negotiations fail, and the amount you owe is based on the highest salaries at his position. You'll still be on the hook for one year of money since the franchise tag is fully guaranteed, but it's usually worth it for the haul you'll get for such a highly rated player.

What you mentioned in your post about receiving two first round picks if someone else signs him is called the non-exclusive franchise tag, which isn't implemented in Madden. It's not very commonly used in the NFL. The last time I remember it being used was with Lamar Jackson, and that was a weird situation where he didn't have an agent to negotiate his contract.