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Looks like they fixed this issue. I am not seeing any generated young, high potential free agents in pool anymore.

Piggy back off what Wiglaf stated, if you cancel mid-starting a new Franchise it will load default rosters. To re-load live rosters, go to Settings cog icon in main menu -> File Management -> Load -> Rosters -> Live Rosters.

I see it too. Seems like a bug with 40-man roster set to manual, not placing human controlled team players in Rule 5 draft. Hopefully it gets fixed soon.