Loser leaves town UFC 222 edition

I don't understand this. If a guy is stinking up the joint, why keep him around just to do the job? There are probably 3 other guys with > .500 records in the minors dying to get called up.

Plus the risk of getting cut after a loss usually causes guys either to go balls out or drop down a division (which sometimes actually works) so taking away that incentive is probably not going to help things.

Exactly. Cut guys who have shitty record and are newcomers. If a fighter is established, it's ok to have 3 fight losing streak as after he can bounce off. But if a new guy does not well, like for example Albert Morales who is 1-4-1, cut him. UFC it's not clearly place for him. In worst case he can go to minor leagues, build up and come back.
 
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