Sanchez has been called the worst catcher in baseball. So on the one hand it might seem he is just a breathe away from unemployment, and on the other hand an arbitrator might award him +7m if he plays. Considering the twins off-loaded 25m from Donaldson's contract for this year, it makes no sense for them to take back 7m for a player they might cut anyway. I would say they could do better by signing almost any minimum wage catcher and apply the 7m savings toward a starting pitcher.
If the twins really like Sanchez and want to keep him, and if Sanchez realizes he is close to being cut, perhaps they could agree on a low base salary loaded with incentives. But definitely do not keep him for a guaranteed 7m.