Yeah they have the athletes in "athletic PE" the last period of the day so they can get in an hour of practice before the school day ends. They did that at my kids' school. All legal in that scenario.
I am not aware of these specifics, but pee wee leagues then middle school running the high school “offense” is a huge advantage. The issue is that the junior coaches have to be on board with the bigger picture. As an aside, I was keeping the clock at a middle school game (those coaches are saints, by the way). Anyway the head official came over and told me the most important job was to keep the clock running, at all costs! They all had stuff to do after the game.
No rec dept teams over here (FLA) but youth leagues all over. This is pretty common over here, youth league teams located in a high school district will run the same O and D schemes. One coach over here wouldn't play any kid that didn't grow up in that system. He got fired for losing after 6 straight 2 win years. Public schools over here can't technically "recruit" but they do indirectly. In order to save money, the county only offers certain programs at certain schools. For example, all schools may have a spanish class but only one school in the county will offer say German. All you have to do to go to that school is say "I want to take German", accounting, auto mechanics..... .
I know this doesn't apply to your scenario but it is common practice in middle school, and late in the game, to let the clock run when the score is out of hand. The losing coaches never say shit cause they're ready to get out of it.
Other than not playing kids who didn't grow up in the system, I don't see a problem with it. It's actually pretty smart.