Stars are worthless, they are cosmetic only, quality is permanent.
You only lose the star when going up a level this is because the players at the next level have better quality.
When you are in level 2 and look at a club in L1 you see 2* players but L1 sees them as 3* star players, when you look into L3 teams you will see 6* players but again if you view from same level they are 5*.
Players never lose the quality they have gained. So it does not matter, it's for show to make you spend more tokens every season because you feel your team is now not as good.