If Carzola is playing by the end of the season, there will be a queue of clubs wanting to sign him for free in the summer. Never thought I'd hear an Arsenal fan talk about him like that, you play so much better when he's in the team. He could easily have a "Gary McAllister" style end of career cameo elsewhere. I would have thought he'd be invaluable to have alongside other younger midfielders to help bring them along
Not sure the Gary Mac comparison is a good one. For starters, Gary Mac was a lean fitness fanatic who didn't suffer from a major injury and played for us at a time when football was much slower paced than it is today. Cazorla has a complete different body type, has missed two years of his career through injury and plays in a much more physically intense period. Yes it could happen, but no responsible club will be making plans on extremely rare chance that it will.
Also, Arsenal probably know that there's no club better than Arsenal who would buy Cazorla as a first team player given his injury history. Maybe a club like Everton could say to him "you're guaranteed 1st team football whenever you're fit", but that's probably as good as it will get for him.
The other options could be leaving for a better team which will no doubt be under the proviso that he'll be squad member. If Arsenal wanted to keep him though and he did take the better club option it wouldn't say much about him as a man to screw over the club that's paid him millions whilst he's been out injured for 2, possibly even 3, years. Seems out of character for him but it could happen.
Either way, I don't think Arsenal have done anything inept with his contract situation, it doesnt make sense to commit to anything now. If he's a perma-crock, then it'll be goodbye & thanks for the memories, or even possibly a Mertesacker type coaching role. If he makes a full recovery then in both parties interest it'll likely just lead to a new contract.