Did the Treaty of Guadalupe Hidalgo intend for Mexicans to live in the USA but under Mexican law?
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IANANCL (I am not a 19th Century Lawyer), but it doesn't seem that complicated. Those words are saying residents of the territory switching hands have a year to decide which country's citizenship they want to declare. The only tricky part is that its worded in such a way that not making any such declaration at all defaults the person to US citizenship.
The fact that nobody is getting "kicked out" is perhaps made clearer in the previous paragraph:
Mexicans now established in territories previously belonging to Mexico, and which remain for the future within the limits of the United States, as defined by the present treaty, shall be free to continue where they now reside, or to remove at any time to the Mexican Republic...
This same paragraph talked a bit about property ownership. However, it basically reaffirmed all prior private property ownership, regardless of nationality. There were some interesting promises against taxation that I don't quite understand (my instincts say lawyers likely made a good bit of money litigating the boundaries of that language.
..., retaining the property which they possess in the said territories, or disposing thereof, and removing the proceeds wherever they please, without their being subjected, on this account, to any contribution, tax, or charge whatever
This of course didn't apply for citizens of native nations ("Indians"), who it looks like from the treaty the US had little intention of treating like full US citizens.
Considering that a great part of the territories, which, by the present treaty, are to be comprehended for the future within the limits of the United States, is now occupied by savage tribes, who will hereafter be under the exclusive control of the Government of the United States, and whose incursions within the territory of Mexico would be prejudicial in the extreme, it is solemnly agreed that all such incursions shall be forcibly restrained by the Government of the United States whensoever this may be necessary
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