Does it show he lacks ambition? Maybe. But maybe Law has simply looked and thought "What are my long term ambitions?". As good as he is, in England mid level Championship is the best he's looking at, if he's lucky. He can make as much playing for Rangers, pick up a couple of (worthless) medals, receive adulation of large crowds (they, like Celtic, see themselves as a cause so he will be one of "us" against the world) and have an easy ride against inferior players.
Would I have made the same decision? Probably not. Can I understand and sympathise with it? Absolutely...