Jacob Phillips' three-year tenure with the Browns has been a bit of a rollercoaster. He'll show flashes and even get some solid run as a starter when someone ahead of him gets injured, but then his game will completely fall apart and he'll be dealing with injuries of his own.
Unfortunately the 2022 season was probably his worst, seeing his PFF grade plummet to 36.7 in part because he was totally exposed in pass coverage. He gave up a whopping 11.2 yards per completion on a 71.4% completion rate when targeted in coverage. Adding in that he didn’t offer a ton as a pass rusher (8 career pressures in 20 games), he's just not someone worth waiting around for to develop.
The Browns would free up about a million dollars in cap space by releasing Phillips, and more importantly they'll free up a roster spot for someone who has the potential to develop into a more meaningful contributor at linebacker.