... it means he's taking Freddy's spot in the rotation and starting tomorrow night's game. Any other reason would be completely stupid and unacceptable. Phelps is finally stretched back out as a starter, struck out 8 in his most recent Major League appearance, and has been lights out in his last 2 MiL starts (0 R, 18 K in 13.1 IP). To take a young prospect on that kind of a roll, who has already been shuttled back and forth between starter and reliever multiple times already this season, and swap him for the last man in your current Major League bullpen would be beyond idiotic.
I don't care if it's to showcase him to other teams as a possible trade piece or not. Phelps is a better pitcher than Garcia and it's already a not-so-big secret that his starting schedule is matched up with Freddy's anyway. And Freddy wasn't exactly sharp in his last outing. Anything the Yankees get from him is gravy, and he's shown the ability to be effective as a reliever, so better to move him back to a less-important role now and possibly improve your rotation in the process.