There’s a fair amount written on the subject. Here’s a quick summary of what one source (recruiting-101.com) has to say……. When a coach says that they want to offer you a preferred walk on spot, they are saying that they will eventually have a spot for you on the roster when school gets underway in the fall. You have been given the green light to at least be on the team during the first year and be a part of practice. A walk on is in a much tougher situation. Colleges even at the Division I level in football have tryouts to see if you can make the team. If you are a walk on, you will be going to those tryouts to see if you are good enough to practice with the big boys throughout the entire year. You basically have a tryout to be able to be a preferred walk on.
I see no reason why a “preferred walk-on” couldn’t work his way up to a scholarship.