This rule really doesn't work for 1st round picks that they're referring to IIRC.
http://operations.nfl.com/football-ops/league-governance/2017-18-important-nfl-dates/
There are a couple of dates listed there that are important. The August 8th that is being referred to means if a player doesn't report by then his first year of free agency is a restricted year instead of unrestricted. First round picks have the 5th year option so I don't think that would apply to them or if it does it means that 6th year would be unrestricted? The big date we have to pay attention to for AD is November 14th which would be prior to our week 11 game. If players holding out including rookies that went unsigned they cannot play in the NFL in the following year. That's my understanding at least of the rules, granted we haven't had a holdout in ages so I'm not totally up to snuff on this.