There were no other options for HS players to sign last year (we actually signed 2 HS players for $20K - McKenna and Phelan). Some chose $20K over what might be a potential $125K or a bit more this year simply because they wanted to start their careers (and colleges were not open anyway because of the pandemic).
20 rounds versus 5 means there will be very few of these HS players that sign as free agents. In the 40-round draft there would always be a handful that slipped through the cracks (like Carlos De La Cruz) but even then we could offer $125K or $100K as opposed to $20K. MLB does not want to develop these second and third tier prospects. The system is basically pushing them into college or JC ranks.
Rounds 11-20 will include some of these players, but after round 20 it is going to 99% marginal college players signing to fill out rosters. With 180-player limits there simply is not room to develop a third tier 18-year-old.