Here's my take: Cleveland did not circumvent the league rules by not extending Boozer the extra year, and did have the ability to sign him to the contract they offered him at the time they offered it to him. In contrast, Minnesota DID circumvent the league rules because the agreement with Joe Smith is one that could not be done at the time when he signed.
Cleveland shot themselves in the foot by offering Boozer only a 2-year deal plus option in the first place. By offering him the standard 3-year deal plus option when they drafted him, they could have avoided the problem they ran in to - the inability to exceed the cap to extend Boozer while he was a restricted free agent. Golden State faced the same thing with Gilbert Arenas.
Keep in mind that Cleveland *COULD* have matched Utah's offer, and Boozer would be a Cav. It's just that they couldn't do it without exceeding the cap because Boozer did not yet have Bird rights, and they would have had to dump other players to do that, since his Utah contract couldn't fit under Cleveland's cap space available.
In other words, if Cleveland did what it said it was going to do, it would have been valid at the time they did it. If Minnesota did what it said it was going to do, it would not have been valid at the time they did it.