First, let us deal with instructor certification within the rank structure. Traditionally, when lining up for class, students line up by rank. Instructor certification does not matter when lining up by rank since instructor certification status is a separate entity from rank. This make sense since it is quite possible to have a 2nd degree certified instructor in a class that has 3rd or even 4th degree students. When instructing, the instructor runs the class no matter the rank of the instructor and other students.
In most organizations, students line up by rank with age have priority within the same rank. This makes sense, except when it pertains to children ranks versus adult ranks. It appears that your organization moves students into the adult classes at 13 years of age and considers them as being in the adult ranks, even though a child does not legally become an adult until 18 years of age. Contrary to this policy, your organization does not allow instructors to test for certified instructor status until they are at least 18 years of age.
I think it is degrading for adults to have to defer to children. Children are taught, or should be taught, throughout their childhood that they should respect their seniors, that adults are much wiser and should be obeyed, and that adults have certain privileges that children do not have. Adults should never have to defer to children. However, your organization, and many others, considers it is okay to have adults call children sir or ma’am and to give children precedence over adults.