I'm not giving much credence to this. The part about him realizing the Magic have more to offer makes me lose some faith in the source. And sometimes a writer's opinion can seep into the narrative and he reports what he surmises. Not saying this is what happened, but it's possible. The thought process behind "Paul realizes" could've been, "He has to realize it because it's obvious," not necessarily because it was said that he realizes. Or maybe the source
thinks that Paul "realizes" and relayed it as fact.
Why would Paul think that? Why would Paul care? Why would Paul say it? The part about him favoring the Magic because of Howard (and Rashard Lewis on the wing) makes sense. They're better than the Knicks, him being there would elevate them above the Celtics, no state tax in Florida and he's a southern boy. But I doubt he's given much thought to or cares much about what the Hornets would get back. I also have doubts that he'd really belive the Magic have the most to offer them, since they don't. Orlando's best player is an untouchable and their second best player (Lewis) has a contract that nobody wants. So all they have to offer is probably Vince Carter's expiring deal + Jameer Nelson and perhaps Gortat. And that isn't nearly as good as what the Knicks could put together, since New York has Curry's expiring and a roster full of talented youngsters, none of whom the Knicks would put the "Can't Have" tag on.
This is just one of the many reports that'll be coming out in the next week that we shouldn't pay much mind to.