That 500,000 is guaranteed. If you factor in a modest 400,000 buys to an appropriately promoted PPV then he's pulling in around $1,500,000 which is an excellent payday for a guy that is insignificant to the sport. That's pretty close to being charity.
Maybe he's trying to get familiar with the southpaw, fast handed style across the ring. Could be some sort of plan to stay busy and maybe even work on what could work against Pac if he ever gets the fight which I'm pretty sure he'll try to get again if Pacquiao emerges victorious from his clash against Cotto.