Major League Baseball free agency is not the most efficient thing in the world. Everyone knows that. That’s why prospects are so valuable even when, statistically, any individual one is unlikely to become a star. The way baseball economics is set up, those prospects, if they are good, are significantly cheaper than veteran free agents and therefore a significantly better deal.
There are a lot of quirks to MLB service time rules, but here is the base framework for why free agency is what it is. When a prospect graduates to the big leagues, he is under contract for six full seasons; a midseason call-up does not count towards that number, as it is a partial season.