I personally would go to the league, it could promote change that
would be better for all the teams in the future. Couldn't hurt.
You could mention it to the other coach, "are you sure you didn't know these kids before?" I had them rated low, kind of in jest so they know you know whats going on (not that they would change their approach)
I have no doubt that coach new and either had those players sandbag or had his son or another player on the team ask them to sandbag, so they could get them on the same team. I've seen it many times and it does happen in almost every youth league there is unfortunately. I had three sons play baseball every year growing up and seen it many times. The league would need to have people at the top who know these players. Who have been around little league, watch the younger leagues and talk to coaches etc. There was one rec league that had an umpire who would do all the leagues and games and was a former college player so he knew the kids and coaches and could keep that kind of stuff from happening. You would like to think the coaches would just be honest right, but it's amazing what some of them will do to gain an advantage.
It is worse in rec leagues. If your own son is good enough and or you really enjoy coaching good baseball I'd do super league and forget about rec league. one of my sons was really good, all star every year and played up, we then went super league and it was night and day different and better. A couple years later the rec league coach asked if he would come back and play as the league needed players so he tried out, did his best, was drafted first and shows up to practice and there were only 3 good players on the team and half the team looked like they never played before, it was dangerous. My son didn't realize, was playing short stop and burns a ground ball to first and the kid almost started to cry as he jumped out of the way of the near 80mph ball. Could have been seriously injured. It was the same when my son hit the ball and guys who never played being asked to catch a line drive coming at their head going 100 mph. Mixing guys who have been playing since they were 5 and now 14 and very athletic with kids who are 14 and never played before is not good. It's not good for the elite players and not good for the beginners either IMO. But it is what it is.