Using the Al Smith Classic for this issue isn't a good example. There's only a few schools in Indiana fielding multi-varsity teams. The coaches at the Al Smith seeding meeting are going to know who is who and how good they are. All you have to do is a little research on this site...
I would say if Clay avoided wrestling Penn's second team at a varsity tournament and either give up opportunities to wrestle or worse forfeits, that's their problem. These guys on Penn's second team are good, just not good enough to be on their "varsity".