Rosters are 17 now with 2 2-way contracts allowed which I assume go to Kadeem Allen and Jabari Bird. So, I think there is room for Larkin, but the question we are all asking is, WHY?
The why is simple.
1) We have a starting PG who is currently rehabbing from injury.
2) Both the starter and the backup are free agents next year.
3) If we assume it's two out of three of bringing over Yabusele, signing Theis, and signing Larkin, does it really make sense to have essentially 4 roster spots taken up by rookies who play the 4 or 5 (Yabusele, Ojeleye, Zizic, and Theis)?
4) While Larkin isn't anything special, he's entering the peak years of his career (turns 25 in October), and it's not beyond the pale to think he could be a serviceable 3rd-string PG at the minimum for a coupe of seasons in his prime. As positionless as the Celtics try to be, they generally need someone to run the point. Depth at that position is important.
5) If he doesn't work out, it's only wasting ownership's money. It's not going to preclude other moves.