Being on a coaching staff that gets fired will set an asst coaches career back a few years at the least. Being on an asst coach for a team that is a top 15 team year in year out will help you career out a lot.
Fred needed an asst coach. Fred knew he was going to be out for weeks with his heart procedure. He needed someone who would be loyal, knew ISU, could get to Ames and get going right away, and someone he could trust why he was out. TJ was in a bad situation and fit that perfect. As for him not looking at head coaching jobs, with Fred being laid up he didn't need a coach looking or taking other jobs so TJ respected that and turned down the interviews. Also the jobs he was up for were not great jobs. Add to that he has been out of the Midwest for 2 years so he may not have a relationship or even know about kids that can help his team, if he were to be head coach. Him being on the ISU staff will help him get more eyes on kids for future opening and help him get a better job.
OR Fred could leave for the NBA and TJ is who he has hand picked to take the job after him. If that is the case don't you have to trust Fred on that decision.