Avalon may still continue working on a "per appearance" basis but as of now, he is not under contract with them. Avalon has been with the company since 2019.
There are several AEW deals that are up this year. Some will not be renewed. Presumably, many of the names that rarely appear on AEW Dynamite will not be renewed.
Tony Khan has been adamant about not wanting to fire people during the height of the pandemic, which is why you didn't hear stories about mass releases. Earlier today, Lio Rush announced that he will be a free agent soon when his AEW contract expires next month.