Not an author but I believe it works like this
1. You lower the Nation's youth rating (which lowers the general nation's pool of good players)
2. Because of this there are less high PA players (to recreate the current distribution, because the game creates more high PA players in youth intakes compared to real life)
3. Because you have less 170/180+ PA players - your youth players aren't super talented like they could be (if youth rating wasn't touched)
4. Because you have more 'medium' players, your preview is compared to this 'reduced' players you were getting. Like, you could have 2/3 intakes with 160/170 players and in next years your intake would be compared to these 160/170 and be crap. But if you have reduced youth ratings your 'average' intake would be worse so every intake would be compared to for instance 140/150 (because we reduced the general potential). So in general you should have more average premier league players from your intake (like it could be in real life) or you could have better ones because every PL club have 10 homegrowns with premier league ability.
It's a delicate process messing with the youth rating because it's a fixed value and will not change throughout the game.