It would be political suicide for the Democrats not to go with a sitting incumbent President as their candidate, especially against a candidate who was formerly President.
Different states have different deadlines for getting on the ballot. The DNC is already going to have to a pre-convention virtual convention where they legally nominate Biden so he can get on the ballot in Ohio. The physical convention will be for rallying the party behind him. If they were to switch to someone else at the convention, at the very least Ohio would retain Biden on the ballot. Ohio does allow for 'faithless' electors, so Biden winning Ohio while the official nominee won other states might not be the worst thing provided the electors could be trusted to switch their vote to whoever the DNC put up in place of Biden.