Right from MiLB
https://www.milb.com/about/faqs-business#19
I never had a problem with any high draft picks being cut. However I also don't play longer then 10-15 years in a universe. Will draft picks not make the organization? Absolutely. Usually lower round guys who are fighting with scouting discoveries and other type players.
Will the player/ai eventually have to make tough decisions? Yes. All those international guys if they are in the minor leagues there clock is running. Say you promote someone at 16 to minors. Unless they are a super star they might not develop in time to play in AA or AAA and they will too many years of service for A+ ball. So yeah those guys have to be cut.
But I also recommend turning all the international and indy leagues on. These guys will find places to play. Maybe they develop overseas and make their way back to the MLB.
Will someone that becomes an all star be cut at some point? Absolutely but this happens in real life. Even if you get a highschooler at 18 he might not develop by 22 and if he can't play A+ or AA then he has to get cut. He can still develop and maybe he goes with another team and becomes a super star at 26.
To me that is baseball. Can't have room for everyone.
But ever player is different so you have to find out what you like. You might even need a throw away season to learn what sort of settigns and setup stuff you like