Seems like this comes up every year.

In one of my leagues last year, an owner who has since left, did exactly what is described here.

In the Monthly FA, he was in the top 6 picks record wise, he then cut his rooster down to 25, lowering his PB Value to the point where he received a high pick, number 1 or 2.

In this draft the top 2 picks were Willis and Webb. He got Webb and then re-stocked in the later rounds---even getting some of his 'cut' players back.

One way to avoid this would be to cap the total number of cuts in the monthly FA to either 4 or 5. Very few teams draft past the third round in the monthly FA anyway.