Is using the game mechanics seen as a cheat or exploit? I thought it was just smart and observant.

This particular one discussed here benefits all, not just one.
In fact it is absolutely done for the greater good since the ones to do it don't really need to.
They can finish without the adjustment. Also, one can drop in arena when one wants.
This way the whole server does the event and boosts, which in the end will also mean more income for Tynon.

In my view - but just me ofcourse - it actually makes the game and server more balanced since this way (almost) all players get acces to the rewards.
Not just the high powered ones so it bridges the gap between big and small somewhat. I feel it imperative to make sure the smaller powered also have a fun game to participate in.
They are part of the server and already get a raw deal, get bored and leave.

Most games I know have areas where the players can go and are at the same level.
I feel this is what palace gives when the game mechanics are smartly used to have different formations up.

I would say it is exactly what the devs wanted - Think, be smart and make the most out of this game without cheating.

But again, just my view.