Altherr is useful as a reserve, though the extra right handed bat is not really needed with the current roster. If we added a Moustakas in addition to Harper it might create a little more room on the roster for a right-handed power bat in reserve. But if we sign Harper but keep Franco, that means we have lots of RH bats in the lineup (McCutchen, Hoskins, Segura, Franco, Altherr) and few people other than the pitcher that Altherr might hit for.
The biggest reason to prefer Harper over Machado might be that he is left-handed and fits the lineup better.
Altherr should be out of options. Quinn also. Williams has two more but really has not done anything to make the team want to demote him. Makes him a trade candidate if the bench is full. Quinn and Herrera also. If we don't sign Moustakas I kind of like keeping Williams on the bench to give us that second left-handed power bat.