My interpretation of the rules listed on Page 1 is that the prior year AA condition applied to the specific period:
-between the cut date and the Rule 5 Draft
Further down under:
MiLB Roster Management
Prospects may not be promoted to the MLB roster until they have played at least one game at AA or higher. Similarly, free agent prospects may not be added to a MLB man roster until they have played at AA or higher. (Note: This rule is intended to prevent issues arising from owning players in the low minors added to the database by Yahoo.)