Yep, as I understand it you got it right. National has said that YE bump ups cannot play at Nationals at their lower level. But they are leaving it up to each section to establish the rules for if or how far they can play in playoffs at their lower level.
So in your example, any local/city playoffs would likely happen in the Fall and without YE ratings out yet, the full roster would be eligible. But say that States/Districts are in 2017. Your section/district can decide whether to allow the bumped up players to continue to play at their lower level or not. Similarly for Sectionals.
Since National is not going to allow them to be eligible, you could make the argument that the section/district shouldn't either so that you don't have a situation like you describe where a team wins their section but then doesn't have enough players to go to Nationals. On the other hand, you could argue you should let them team play and win their section, and if they can't go, then the runner up can still fill their spot and go, so what is the harm?
IMHO, the harm is that the team that can't go may have kept a team that could go from making it to Sectionals where they just lost out on a chance to go to Nationals.