Summary
Despite having some moments for the Pacers near the end of the regular season, Martin hasn't shown enough in his first couple seasons to really prove he belongs in the NBA. He has some size and athleticism that helps him finish at the rim decently, but needs to hit outside shots at a higher rate to really be a rotation-level wing.

Martin will be 26 by the time the '21-'22 season starts, so there's not a ton of upside. I could see the Pacers keeping him around next season, but considering the few roster spots they have available, they're probably better off taking a flyer on a younger player.
 
Cap Considerations
Martin's $1.7 million salary for 2021-2022 is non-guaranteed, and if he is waived he will become an unrestricted free agent and the Pacers will have no form of Bird rights on him. The Pacers will likely remain over the cap even if they waive Martin and renounce all their free agents, so they won't get much of a benefit by waiving him unless they just would rather use the roster spot elsewhere.

Since Martin is on a minimum contract, any team could claim if off waivers. If Martin goes unclaimed and becomes a free agent, other teams will have multiple ways to sign him as even teams without cap space could possibly use either of the Non-Taxpayer MLE, Taxpayer MLE, or possibly even the Room MLE to sign him. It's likely Martin ends up settling for the minimum.