I've been speculating for a while that the reason the Dolphins might not want to get rid of Garrard during cut date would be because they need to make sure he's healthy and practicing before they cut him, so that they don't have to go through an injury settlement. Sure enough he wasn't healthy enough to practice at cut date, but he is now and has been doing agility drills without problem, so now he's healthy enough to cut safely.
I imagine the Dolphins will keep him on speed dial in case anything happens during the season, provided another team doesn't sign him. He knows our offense.