Perhaps in the early 20th century before the time of national sovereignty when Rav Kook instituted the heter makhira in the yishuv it made sense to use such a legal fiction for sheviit because there was as yet only a vague notion of who was sovereign over the land of Israel. After the establishment of the State, however, the act of selling the lease to an uncircumsized resident ought not to have any effect.
The issue of sheviit is the issue of sovereignty over the land, and that sovereignty does not transfer to ethnically excluded residents; nor could individuals transfer sovereignty, in any case.
Sovereignty is a deeper property right than simple ownership, especially of land. When market transactions bump into the proscriptions of entailment and inalienability they are really bumping into the limit of ownership rights before the prerogatives of sovereignty.