OS8,
My understanding it is looking at results over a rolling 4 year period, which may or may not include drafted players.
It is not a normal practice for many coaches to intentionally replace players each year by bringing in transfered players from other D1 programs. The object is to bring in younger players for competition and to grow within that program (through instruction) to replace other players when they leave. Sometimes a player is brought in to fill in gaps. Many coaches use JUCO players for that purpose.
Some coaches do very little to develop their recruits, it's reload every year instead of restock. That's why some programs go through growing periods and others don't. You need to figure out, in the recruiting process, who reloads and who restocks.
Transfering in D1 players doesn't hurt a program, but that creates, in some programs, transfers out, that hurts a program.
What also hurts is allowing your players to take the minimum (12) credits, then the player forgets why he came to college and all of a sudden he's in his junior year and he doesn't have enough credits to be a junior.
That's what this is all about.