These gradings are indeed final. It seems like a mess to be honest.
I know that Vinnies applied for AFL5, reason being the team is an amalgamation of remaining AFL4 & 6 players and they felt that grade would be fair. They were expecting to be told to shove it and have to remain in AFL4. It comes as a surprise to everyone that they are entered in AFL6 to be honest. Especially considering AFL5 only has 14 teams.