My thinking is that history suggests he will not be able to contend for the overall in the Tour, but having Caruso there is indicative of them at least allowing for the possibility of trying to get on the podium. He is too good, and having worked so much in the Giro, it makes no sense to have him there just to make up the numbers. I think Caruso is better for the TTT than Pozzovivo, so I think that is another clue that the team selection is being made with a GC effort for Nibali in mind.
All that being said, I also think that they are in a position to be realistic about the riders they have available. The first nine stages include four that should appeal to Mohoric and Teuns, possibly even to Garcia Cortina. Having riders chase those stages should keep Nibali from having his team do any work on the front of the peloton, meaning he can save himself for the two stages that do matter for GC - the TTT and the stage to PdBF. Thus, the team can reassess at the first rest day, and decide what the plan for the rest of the Tour will be.
Keep in mind also that I think there is some planning going on for seeing if Dennis can make the transition to a GT contender. Having a Nibali absorb all the attention in the first week makes it possible for Dennis to ride without as much pressure. Will be very interested to see how Dennis does on the PdBF, as he should not be required for Nibali there with Caruso riding. Whether Dennis drops early on the final climb of that stage or not, if Nibali falters there, they can switch their objective to supporting Dennis for GC pretty easily, I would think. And with the ITT still to come, Dennis has at least one stage left where he should be able to make up some time on other GC riders, with one or two exceptions perhaps.
I just think that the Bahrain Merida team may actually be constituted of some options that perfectly suit having multiple objectives that can allow them to be flexible in how they ride the Tour this year. And that is largely a function of having Teuns, Mohoric, and Dennis there.