Hynoski was a restricted free agent who was not offered a non-compensatory tender by the Giants, which would have been worth over $1.4 million this season, so the Giants saved $400k by handling Hyno this way.
By virtue, he was allowed to test the free agent market. It appeared he would end up in Detroit, but now he's back to battle Jon Conner for the FB job.
Perosnally, I thought the Giants were sold on Conner, but Tom Coughlin does not like to go to camp with positions going uncontested. He believes in competition. Only one FB will be carried on the roster, however.