Ah I've misunderstood the wording then. My initial interpretation was that having a full match squad under 21 automatically classified it as a Youth Team, not that this rule was only applicable to Youth Teams and other teams were exempt. Working as intended then.
Not sure if this is an issue or I'm just missing something obvious. My Irn-Bru Cup Match Rules state that the match squad cannot have any players aged over 21. I can completely ignore this rule, it doesn't show during my team selection, other teams frequently ignore it as well. I'm playing as Albion Rovers.