IMHO - and this is an admittedly tangential thought at best - there should only be 2 AM divisions.
AM1 (aka Advanced) where you play for script, no ratings limit.
AM2 (aka Intermediate) where you play for trophy only, with a rating maximum
That way you eliminate bagging and "reverse bagging" as the OP calls it. If you want to play in an amateur protected division you shouldn't play for monetary prizes. I think tournaments could be better served by using money to put on a better production than to be a new plastic source for half of the entrants.
I understand the logic 10 years ago...but I'm thinking disc golf has enough of a following now that we start to up the production value of the tournament itself and require that if you want to get paid you get good.
Just my .02