In general you should only allow players to play up at most one section. After that it just gets frustrating for the higher rated players. Similarly in general I think unrateds should be allowed to play in any section. That way they can pick the section based on the strength they think they are. They don’t always do that correctly, but it only lasts a tournament or two for them.
I’m not opposed to limiting prize money to unrateds in lower sections to guarantee the integrity of the section.
There are, of course, exceptions to this. It depends on the type of tournament.