Whitman is free to demonstrate John Groce's job security to Jeremiah Tilmon. It's called a contract extension. This isn't complicated, the size of a buyout is how job security is determined in the college coaching industry. Give Groce a massive new deal and this chatter is settled once and for all and all the other coaches recruiting Tilmon will have no choice but to shut up.
Whitman isn't going to do that though, because Whitman, barring a miraculous on-court turnaround that Tilmon is powerless to effect, is going to fire John Groce and get a coach he believes is a long term winner. Ideally he'd have Jeremiah Tilmon trapped in an LOI at that point, but that's a minor detail.
This is the long and short of it. It's a no-win situation right now: if Whitman were to bet big on Groce by extending him and giving him a big raise and buyout, Groce would undoubtedly be able to recruit more effectively. However, the fanbase would be outraged and Whitman's career would hinge on Groce becoming a long term winner at UI. Not a smart bet for Whitman to make given the evidence at hand. However, without that actual material vote of confidence, Groce is behind the 8-ball.
As I see it, right now Groce is in a tough spot: Whitman has effectively given him a prove-it year where Groce needs to 1) convince top 2017 talent to come to Champaign despite his tenuous job prospects, and/or 2) make the NCAA tournament with a mediocre roster. It's tough to sell a recruit on literally being your job security; Groce is essentially at a point where he has to say, "I might be on the hot seat now, but if you commit the seat cools down. I might not have won many games so far, but if you come we'll start winning." It will take a special group of kids to commit to saving the program and the coach's job.
I'm a hopeful guy by nature and I like John Groce as a person and representative of the university, so I'm crossing my fingers that the stars align. If I had to bet on an outcome, though, I'd say Groce doesn't get Tilmon, maybe doesn't get Goodwin, misses the tournament again, and is let go next spring. I hope it doesn't go down that way.