There are people on this forum who will know the details better, but I recall that there was some weirdness during a Greed taping where they didn't have enough contestants in their pool and the solution was to give somebody (bodies?) who had just lost another opportunity. It wouldn't surprise me at all if the Legends situation was similarly more about production efficiencies that about actually having kids reapply, retest and replay at some future date. They taped a ton of shows all at once, and rather than having extra kids who might not get to play at all, why not keep some losing kids around as backups for the last few tapings?
/I actually have dreams that involve second chances and Jeopardy. Really.