Let's get this out of the way right now: Adam Frazier was not "bad" for the Orioles in 2023. He put up 1.7 rWAR in 455 plate appearances with a .240/.300/.396 slash line with 13 homers. Not exactly a guy that was tearing the cover off the ball in 2023, but he wasn't a guy that any team would be embarrassed to have bat low in their lineup even if he is well past his prime.
The "problem" the Orioles have is that they have too much infield talent with not enough roster spots. Jordan Westburg was already the preferred option at second by the end of the season and Jackson Holliday, Coby Mayo, and Connor Norby are going to be in the big leagues sooner rather than later. The Orioles don't have the roster room in the long-term for all of these guys without factoring in Frazier (again, Baltimore's big league infield is loaded), so what is the utility in keeping Frazier around when he is decidedly medium at best?
Another problem to consider here in context with all of Baltimore's youth is price. Despite being one of the Orioles' least exciting every day players, Frazier was Baltimore's third highest paid players in 2023 at $8 million. While that is more an indictment of ownership's unwillingness to spend than anything else, that is money that should probably be spent investing in the pitching staff and not in a second baseman in decline with better and cheaper options available.
In short, Frazier seems like a good dude who will most certainly be employed as an every day player next season somewhere, but it shouldn't be with the Orioles and instead should probably be with a rebuilding team looking for some roster stability.