The law you posted prohibits the state of California from requiring that any of its own employees travel to a discriminating state, excepting a very broad list of essential purposes. I don't see the contractor thing you're referring to.

You also seem to be describing a case where California is a direct market participant (they're paying the contractors). States are allowed to discriminate in favor of their own citizens (or, I guess, anyone else) when they themselves participate in the market.

Yes, possibly legal. Still a form of economic sanctions though.

It's not just that they don't require employees to travel there, they also don't pay for trips "This bill would prohibit a state agency from ... approving a request for state-funded or state-sponsored travel to ..."

The bill doesn't explicitly forbid government employees (and by extension, the government of California) from doing business with North Carolina - it just adds personal, out-of-pocket cost for doing so. (which probably amounts to the same effect.)

In the scenario you propose, California isn't prohibited from paying to fly NC contractors to CA.

Travel from a prohibited state, including the return flight back, shall be construed as travel “to” the original destination.

It also means that public universities in California can't send their student athletes to play away games in states such as North Carolina.

(I don't follow college sports enough to know whether CA and NC even have any universities in the same conference, though, so it might be moot)

Nope, it only applies to "state employees, officers, or members", which students are not.