Groce won't be negotiating anything.
"Negotiating" might be strong, but Whitman will be gauging interest through back channels. If there is mutual interest, then Whitman makes the move. They might not have the terms of the contract nailed out, but there will be talks.
This is not an uncommon practice amongst competent ADs (see: not Mike Thomas). I dont know why you find it laughable.
Because it is laughable.
If that was the case, schools with much more experienced ADs, but more importantly more resources, more prominent boosters, better back channels, more connections, better network, more money (e.g., Oregon, UCLA, OK. State) would have done exactly the same and would have avoided embarrassing searches. Furthermore, from my working experience and involvement at UI, I can tell you that what you call "back channels" are not all that great at UI. Even more, let's not blame everything on the incompetency of Mike Thomas. Ron Guenther made some good hires, yet he struck out so badly with Bruce Weber that he sent the program into a tailspin.
As for Cubit, it has been explained many times that it was such a different situation that they are not even comparable. I have explained, along with others, so many times, a simple search would do.
As for what would happen from a timing perspective, Whitman will decide on Groce first and make an announcement. IF he decides on a change, he will follow appropriate channels and conduct a search, I'd imagine in an expedited manner, without wasting time. Whitman is certainly young enough and smart enough to know that if he wants to have a career as an AD, it is a profession that you do not burn bridges.