Yes he would have to be on the 40 man (back in the day, i.e. until just a few years ago, you could call up all 40 guys in September. But no one else) and his service clock would start.
And the player you would lose is not the guy he replaces now, but rather the Rule 5-eligible prospect you no longer have room for in the off-season, or the returning younger player you cut loose if you need more room.
But, if he can help and is already going to have a chance to make the team out of spring training - or even just by July - that would still outweigh those worries.