Pulling a kid from a team is definitely not an easy decision for staff, either.
That may be the gym's policy.
Ex: There are gyms that require Worlds team athletes to maintain the required tumbling skills for that team with the understanding that they will be removed if they don't/can't.
That doesn't mean it's easy for coaches to actually follow through on it.
Also, sometimes not being on XYZ team removes the pressure to throw the skill. It is stressful when you know you can't throw something, you have a comp coming up, and you're wondering if you're going to be a nugget this weekend. Becoming an alternate on that team, and participating on a team where you actually CAN throw something can sometimes build confidence because the athlete no longer feels like they're "chasing skills." (Ex: Competing on Level 4 and being an alternate on 5.)
Of course every kid and gym is different and I hope you figure out a situation that works for you.