There are gyms that sandbag. But, ime, it's not the norm."Most of the 3s have decent kips and double ROBH and could probably compete 4 pretty decently".
Then why don't they? Do they hold them back to perfect/win level 3??? Seems counterproductive.
There are lots of reasons girls might be competing lower then their skill set seems to be to a parent watching from the stands.
Some girls stay back because they struggled the previous season and need to build confidence. It's not just about skills. It's about setting them up mentally to succeed long term.
Some gyms that don't start competing until L3 may have a girl compete 1 year at L3 rather than going straight to 4 to gain experience.
Another reason is timing. Did they have the skill consistently before the season began? Most gyms have a cutoff. For example, levels are set as of September 1st. If you're close but not quite there on something like a consistent kip, then you stay back because it's time to learn and perfect routines. But they're is still up training going on during the season because the hope is those girls will get the skill consistently and be ready to move up for summer training after states.
It's also possible they are missing other consistent skills they need to move up whether on the same event or others.
Moving up levels as soon as barely ready is not always the best route. There are so many factors.