I've no doubt that some embellishment takes place but nephew was at that time going to a Decile 4 school, had he ended up in the Warriors, Broncos or a Sydney Club system he'd have gone to a D2 or at least a D3.
Interestingly Manly & another Sydney club (Tigers or Dragons, can't recall which) on learning wifey & I were in Brisbane indicated that he could be placed in their Queensland feeder setup: wouldn't have been feasible for him to live with us but at least we'd have been only a 30-45 minute drive away & be able to provide some kind of regular family contact.
Not trying to say the Clubs are entirely altruistic, but it's in their interest for the kids they sign to be as settled as possible & based on what I know - a single case, sure, but I see no reason why it wouldn't have been typical - I think they take their duty of care seriously if only for ultimately selfish reasons.