That just highlights the same issue: How is the 26th player in the country a 4 star and the 124th player in the country also a 4 star? That is a wide gap. How many stars is the 125th player? Seems to me, the top 100 players are 4 and 5 stars, with the super elite being 5 stars. There is no scientific formula here...bottom line is that it is all arbitrary anyway!
In answer to your question, this rating service calls any player in the top25 a 5 star, 26-150 4 stars, below that 3 stars and after that, who cares anymore.
Other services have variable amounts of 5 stars and 4 stars based on their overall rating.
It isn't completely arbitrary, but you are correct, it needs to be taken with a grain of salt.
Fennell, for instance, hasn't really been seen by the recruiting services. They are rating him off highlights. His ranking is going to have a ton of variance. I consider him being ranked at all at least partially a bid to Red's recruiting and scouting acumen.
On the other hand, White has been seen at length by every service, and his consensus RSCI ranking is 20th (as of August). You can be pretty sure, but not completely sure, that he's going to be better than a guy ranked 150th.
Every scout makes mistakes, though. Every year, even in the NBA, somebody is drafted way lower than their actual production, and high draft picks bust. Michael Jordan was drafted 3rd, after all.
Scouting recruits is art and science. Inexact.
But on average, if you recruit all top 50 players and the other team had only players outside the top100, you are going to be better almost every time.