I have not encountered this before. As I remember, when my team was 8th in league at level 32 or 33 (i.e. below 34), it was not allowed to promote.
If league mainly groups teams with similar quality, I prefer promotion rather than staying in same level. No matter my team promote or not, the qualities of opponents are similar. But qualities of 5 star players in market are higher if my club level is higher. As I only use auction market to buy new players, if my team fail to promote, my team hardly improve or even hardly keep qualities through replacing players.