The major issue is that at the time Jones simply could not pick Matthews in the team he was a liability, he wasn't better than McNaughton, and the games he was playing in he was costing the side goals.
In this situation, and within contract negotiations, the player wanting first team football, the player had to leave, mainly for the benefit of his development, he would have had McNaughton blocking his way for many a year.
That being said, the player hasn't developed, he played OK at Celtic, however he has virtually disappeared on the Wales scene, and now doesn't seem to fit in a poor Bristol side. At this moment in time you can hardly label it as a mistake by Jones.