Seems shady. I have only limited knowledge of Thai employment law as it applies to teachers (and much of that I've absorbed through forums), but I know a fair amount more about the "international school sector" and western standards of equity.
I think you're overgeneralizing the "sector" in several ways, and it's unclear if you're referring to your own contract situation or some perception of what's normal when you write "you are now said to be in breach of contract."
Yes, schools will want to know if you're returning. Yes, schools many schools will impose a deadline. Yes, schools may start looking to fill your position if you don't re-sign (or indicate a willingness to re-sign) by a certain time. That time varies by school. Not to overgeneralize, but elite schools are going to try to leverage an earlier recommitment date. Many lower-quality schools will also try to overplay their hand and get recommitments early. And many schools in the middle will take more measured approaches, realizing that good teachers may consider testing the market.
Schools with way-too-early deadlines that expect firm commitments are playing a risky game. They risk teachers who might want to explore other opportunities, but who are open to returning if they don't get a "dream" job, simply leaving. When January and February roll around, many of these teachers will still be uncommitted for next year, but the bridge has been burned.
In your situation, it's impossible to comment with
Thanks for this. The contract says that if notice not to sign for the 20-21 academic year is given by the October deadline, staff will be paid until the end of the academic year “including July and August”. However, after this deadline staff will continue to receive salary and allowances until their last day of work but are “not entitled to the July and August pay and allowances.”
You are right that this is very one-sided as they are not likely to provide a contract which protects the staff for quite a few months.