Yes, if Hyman signs an extension and Toronto doesn't protect him, Seattle can take him and the extension just kicks in for them

I believe, if I remember from last expansion:

if they don't extend him, Seattle can still pick him,
they would have sole negotiating rights with him until free-agency begins
and if he doesn't sign, (this is the part I am uncertain on) he is still unable to sign with Toronto for 1 year

if a UFA is selected like Hyman, they still remain a UFA I think and Seattle wouldn't have their rights. That means that we can still sign them even if they are selected.

true but we may wait to extend him after the draft, with a deal in place but not official

Seattle would hold there rights until the first day of Free Agency. This is 1 week after the Expansion Draft. Seattle would be able to negotiate a new contract before that happens and if they are unable to do so, that player would be a UFA and free to sign wherever.

To the best of my knowledge, pending UFA's need to be protected to 100% guarantee they don't get taken; they are not exempt. Leading up to the expansion draft there is a short period of time where Seattle can negotiate with unprotected pending UFA's. If they can come to a contract agreement in that window, that player becomes their selection from that respective team, if not then obviously they wouldn't waste a pick on someone who's rights they are about to lose.

right. but that doesn't mean that Hyman won't be able to negotiate a deal w the leafs first.

So in theory, could the Leafs leave Hyman unprotected and if Seattle selected him Hyman could simply refuse to sign with them and then sign a deal with the Leafs again once free agency started?

In theory, yes, I think so, but Seattle obviously wouldn't select Hyman unless he signed a contract with them in the negotiation period. They'd just take another player.

There is no 1 year rule. If a player is a UFA they are free to sign anywhere they want.

My ultimate point is that perhaps the Leafs should protect 8 skaters instead of 7F/3D so they can keep Holl.

Matthews
Marner
Tavares
Nylander

Rielly
Muzzin
Brodie
Holl

Hyman says he won't sign with Seattle and they don't pick him, or they do pick him and Hyman doesn't sign and Leafs sign him afterwards

Yes, that's a legitimate thing that can happen, and I expect probably will. Seattle picking Hyman with no contract, however, is not going to happen if Ron Francis possesses any form of competence.

Prior to the season it seemed like Dermott could force the Leafs hand into protecting 4 + 4.

But as of now, seems like Holl is forcing them to look at 4 + 4.

It's pretty well Kerfoot vs Holl at this point (and I say this as a big Dermott supporter).