The division doesn't matter at this point. These kids have 1 year of youth hockey left and they should play in a division with a chance for a successful season. I would rather my kid play on a winning silver team, probably will be, this year than go 4-36 in the wrong division. My other kid will be in black and that's great and it matters for the younger kids.
None of these kids are playing D3 for the most part so just let them have fun.