The more difficult Moves in the Field tests starting next September may drive away some test skaters.
On the other hand, there is still the issue of large numbers of skaters who need to be divided into appropriate competition groups. And if there's too much of a perception of sandbagging by highly skilled skaters competing at lower levels to collect medals, that will discourage less skilled skaters.
Suppose we let skaters test up as far as they want in moves in the field and/or in freestyle (without prerequisites). Keep the competition levels with their content and age requirements the same, and let skaters choose what competition level to enter independent of what tests they have or haven't passed.
The highest allowed jump content and the minimum short program requirements for each competition level would give them a good idea of where they would best fit in. It might take a few competitions before the skater gets a good idea of what to expect at each level, but most coaches would have a pretty good idea. Let skaters move up and down in the levels at club competitions until they feel comfortable.
Regionals is a different story. Juvenile girls and especially intermediate ladies are already huge fields in some of the larger regions. And competing at regionals is prestigious enough that if there were fewer or no requirements and restrictions on entering those competitions, those fields could easily double or triple.
The short program requirements may scare skaters away from competing novice, junior, or senior even if they have passed those tests, if they have the option of competing at a lower level. So the higher level fields would get smaller, and the high-test recreational skaters would swell intermediate field with more skaters who are competent at that skill level.
At the other extreme, all the teenagers currently competing in preliminary, prejuvenile, or open juvenile with a couple of shaky double jumps might sign up for intermediate regionals just to say they had competed in a qualifying competition, especially if they knew they had the option of going back to more comfortable levels in club competitions. That would increase the intermediate field even further with bad intermediate skating.
Of course they'd have to be willing to invest in developing a short program and have the stamina to get through a 2.5-minute long program, which might weed out a few.
Maybe there would need to be a rule prohibiting skaters from entering entering a club or regional event at a lower level than the highest level they've ever competed in a qualifying competition. That would discourage recreational skaters from signing up for regional competition above their competence just for the prestige factor.