[Pelican]

Wow, an ambitious project. And lots of questions. I can help with some.

First, for your "Secession Draft", allowing MLB teams to keep their entire 40-man roster plus "a limited number of...prospects" would not leave you with much talent. That's 1200 guys on the rosters, plus the prospects. The active roster [26] plus the best fourteen (at least) prospects. Your league would be left with the worst AAA and AA players from each organization. You might as well call it the Dregs League.

So I would pare way down the list of players MLB teams can protect. I would not go higher than the 26-man active roster. That would still leave your teams with marginal players. If you are saying the former IL and PCL teams would keep their existing rosters (see below), well at best you would have a AAA-level new league.

When I do an expansion draft currently, I only allow MLB teams to protect twelve guys, plus any players with less than three years MLB service (prospects, rookies). Three years is the default OOTP setting. You could make it two or even one year. But even with the 12/3 approach, MLB teams would be able to keep most of their active rosters (twelve veterans, and fourteen guys with less than three years service), and all of their prospects. Not sure that meets your goal for your draft.

On to your questions.

-IL/PCL/League Settings/League & Teams/League Level [change to "major league"]
-IL/PCL/League Settings/League & Teams [change each team's affiliation to "none"]
-When you remove the MLB affiliations, the AAA players should remain with their teams. No idea what happens to the rare guy [Colt Emerson, until Tuesday] who is in the minors with a long-term MLB contract.
-You could, in the alternative, take all of those existing players on the AAA rosters and make them free agents. League Settings/Functions/Clear Rosters. Their MLB organizations lose them, and your teams can draft them.
-League News/League Events [You can add a draft through the drop-down menu for Custom Events. Set the date for maybe a month in the future, in the off-season.]
-My worry would be that MLB teams (through their AI GM's) would start signing the new AAA free agents. So as a safeguard, under League Settings put all MLB teams under user control (not AI). You can switch it back, once your draft is done.
-I would expect that your financial settings - resources - would have to approximate MLB, or you will begin losing players. One critical setting - if you use it - is what MLB teams pay to purchase your players. I would set that figure very high or toggle it off. You can allow trades with MLB teams or not. Your teams will need big money to retain and acquire MLB free agents. I don't know how small markets and modest stadiums will facilitate that.
-Contracting the minor leagues would create lots of low-level free agents who would presumably not develop. Not good. For MLB, I would suggest shifting current AA leagues to AAA, high-A to AA, and low-A to A.
-Your thirty new MLB-level teams will need minor league systems, unless you want to use Reserve Rosters (you don't, because the players would not develop, because they were not playing). Good luck on finding ninety teams for AAA, AA, and A, plus developmental leagues. I hope you are good on geography.
-You could as an easier but less realistic alternative make all current minor leaguers free agents - their leagues would be independent. MLB teams including your new league would presumably scout and make offers, or better yet include all these guys in the annual amateur draft. More like the NFL and NBA, in a way. I have not done this, but others have, and may have ideas.

Good luck with this. It can be done, but you will be dancing around the "doctrine of unintended consequences". [One small example is that established teams will leave overpriced free agents unprotected in the draft. Do you really want to draft Kris Bryant or Nick Castellanos and pay the remaining years on that salary?]

The closest I have come to this is my 1961 sim with the Continental League as the third major, instead of MLB expansion. (It almost happened.) It was pretty chaotic having eight new MLB teams and the original sixteen.