I think you have to look at the implications of a ruling.
If TMO was allowed to drop out of Class C by rebranding, kill a few Class R mobs while waiting for a desirable set of Class C mobs to spawn then Class C guilds could do this every week, destroying the point of the Class C / Class R divide.
If the staff were to allow a Class C to rebrand into Class R they would have to impose a lock out timer on requalifying for becoming Class C in order to preserve the integrity of the class division.
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