In theory, the average ratings of your closed group would increase. However, the effect is minimal in the bigger picture with thousands of players. Note that the average player has one round dropped out of 50. That works out to one round every three years on average since PDGA members currently average around 16 rated rounds per year.
The thing to consider is how do you know whether a round is naturally poor (normal statistical variance) or deliberately poor? We don't know for sure so we lop off the tiny bottom tail of the statistical distribution just in case to make sure the overall integrity of the system stays intact and doesn't get pulled down by a deliberately poor score that wouldn't be a "naturally" generated poor score in the system.
Back to your original premise with the closed pool of 10 players. What would happen is the SSA of the courses they played, which are dynamically generated from their ratings, would slightly decrease over time offsetting the effect of dropping a few rounds in each of their ratings which would slightly increase their ratings. Net effect over time works out to zero inflation in the average ratings in the system.
Rater of the tossed arc.