I've only thought about it for 5 minutes or so, but I think there is probably a way that he can mount a legal challenge to this policy while still signing the contract and being on the team. I believe the main issue is probably whether the USATF is allowed to force athletes to do this under the Ted Stevens Olympic and Amateur Sports Act. And that law might have its own procedural hoops he needs to jump through.
But to me, it seems far too risky to not sign and get left off the team. If he wants to challenge it, he should have already filed a declaratory relief action and a temporary restraining order in order to try and preserve his rights while still allow the possibility of being on the team. At this point, however, if I were him, I'd sign it while making clear that he believes it is unlawful and that he will challenge this policy after the fact. He may have a mootness issue, but I think he could still make an argument for damages and bring a case.