Larnach and Wallner fill the same role. That role is left-handed corner outfielder. You can have only so many of these on your roster. Sure, if two candidates both prove capable defensively and can produce offense against righty and lefty pitchers alike, then there is ample room for them both. Left-handed batters are always valued. But when there are deficiencies, well, the two guys with similar profiles are always going to be a bit of an odd match on your roster.
Players can go about their jobs in different ways, as Larnach and Wallner do, and still face this. So it's natural that they are thought of together. If Wallner is proving to be the better hitter and (slightly?) better outfielder, and Larnach in particular remains helpless against left-handed pitchers, then Larnach's the one who has to go.