As you say he cannot be bought, I assume he's a "greyed-out" player. They appear on the game, when a team hasn't got enough players to field a whole team.
Mostly they are on the game if you play a small database as you then he won't have that many players loaded.
As you say yourself, if many players a on international duties, it's quite possible that the squad will be filled with "greyed-out" players.
They then aren't regens, but just random players dissapearing again when they aren't needed anymore.
Regens, on the other hand, work differently.
Actually they shouldn't be called regens anymore. It would be more adequate to name them newgens.
This is because on earlier versions of FM, when a player retired, a similar player with the same potential ability, nationality, position and so on would be created and appear on the game. The only difference between the retired player and the "regen" would be the age, current ability and therefore also the stats.
On the newer versions of the game, "newgens" are also created to fill the database with players so that you'll be able to buy young players. Nowadays they aren't connected to the retired players but created randomly - hence their position, nationality, potential and current ability will be random.
When a new season starts (around the 20th of june), you'll get a message telling you about the intake of new youngsters - these are newgens.
Therefore, they'll apear all around the world.
The better youth-setup a club has, the more likely it will be to have a good newgen created.
Hope that answers our question.
David Foster? Regen-how do they work? 
Linear Mode
