I couldn't find it in print to post here, but I'm quite certain that males in APA will only be SL3 to SL7 (for 8-ball) while females can be SL2 to SL7. There cannot be male SL2's, in any sort of sanctioned APA league play.
Your LO's are playing with the rules.
You are wrong. The male minimum skill levels are for higher level play. The League Operator can allow male SL2s in local league play.
From page 85 of the team manual:
"9. NO MALE 1s ALLOWED IN 9-BALL AND NO MALE 2s ALLOWED IN 8-BALL
During the National Level of 9-Ball Team Championship play, men will
participate at a minimum skill level of 2. During the National Level of 8-Ball
Team Championship play, men will participate at a minimum skill level of 3."
There also a mention of male SL2 8-ball players in the section regarding lowest attainable ratings on pages 32 - 33:
"27. NATIONAL LOWEST ATTAINABLE RULE
In general, players who have participated in a National Singles or National
TeamChampionship on the National Level will have their lowest attainables
raised to the highest exit skill level they attained during any one of these
championships. The APA maintains a permanent record of players who have
participated in Regional and National events. Some exceptions may be made,
but only if Local League Management specifically appeals an individual’s
lowest attainable. Those appeals properly justified will be granted. The only
standard exception would be former male SL2s who were automatically raised
to SL3s as described in the Higher Level Tournament Section. In that
instance, Local League Management only needs to submit the appeal; no
justification would be necessary.