Well this thread certainly has evoked various perspectives and emotions from our community about changing teams and when. One of the things that make the subject so difficult is that we all have our own kid's vested interest.
If one removes the child and look at it purely as business relationship, then the following couple of things stand out:
1) One enters a contract for a season (as defined in each respective contract) and the termination clause are articulated within the contract (e.g., no refunds, may not be released to play for others and so on...). The contract implies that both parties will honor the terms. This include the signed players will not be dropped during the contract period, in favor of new/better player by the team/club side, and parents will not take the player out of the contract in favor of another team. It also typically includes that the club soccer is the priority sports for the player. There are things that change, like moving out of the area, player wants to quit playing, and so on. But for the most part, its a two-way agreement that is supposed to be honored by both sides.
2) Since its a business relationship, one has to look after the best interest of own benefit. Problems occur usually as results from the other party not living up to the expectations, implicit or explicit, when the agreement was signed. Once the failure to meet exceptions is established, there are various remedies that include corrective actions to get back on track to ending the relationship. The range is large and the remedy is different case by case (including the personality of the coach and the parents). If departure is selected during the contract period, CalSouth (governing body) will arbitrate and most often will force the club to release the player.
Like anything in business, ethics and integrity is a paramount - by both sides. Which now brings the discussion back to this thread. There is no simply if this, then that type of response that fits every situation, I believe. It is highly case-by-case situation.
Most club contracts stipulates the season as from the time of signing to the end of the State tournament. It is typically April~March for Younger and June~May for Olders. The notion of leaving your current team to go play State Cup with the new team, my sense, is a mistake. Because most teams want to sign you for the new upcoming season while the majority of the current team players have not renewed their contract. One has no idea if all, most, half or few players are coming back. This include the coach. Most coaches are on annual renewal and they change clubs just as players do for a better deal. I've seen a coach sign players up then move to a new club. It may or may not workout with the new coach the club assigns or if you've paid and want to follow the coach, its money lost in the transaction.
If you know that the new team is willing to have you kid just "guest" during the State tournament, and you move before the roster freeze date, maybe....
So, there you go....
Btw, the best way to get onto a new, good team is by skipping the official "Tryout" date and workout with the team prior to the official date. When I moved my then U12 kid years ago, I had him workout in January and secured a spot (verbal commitment only) with the new team while finishing State Cup with the old team. At the end of the tournament, we left and moved onto the new club. He attended one practice a week with the new team, while finishing with the old.