Mussini's handlers/family are not dumb. They know he could get exposed on defense against bigger more athletic guards. If he's at Zaga or Davidson, he gets more time to develop over the years because the in-conference opponents will be less challenging athletically. That's definitely a factor.
That works both ways because those players that play at those conferences rarely get drafted and get NBA contracts because they don't play against high level talent. Exceptions being guys like Curry but they demonstrated in deep NCAA runs that he could play against the best.
So they are aware of both. If you go to a level that you think you can excel at but is below top level then you will need to cover a lot more ground if you ever think you can get drafted.
List of Zaga players in the NBA:
Kelly Olynyk (1st round)
Robert Sacre (2nd round)
Austin Daye (1st round)
David Stockton (undrafted)
List of SJU players in NBA players:
Mo Harkless (1st round)
Jakar Sampson (undrafted)
Zaga has had 8 players drafted since 2002. SJU has had one.
I agree with your general comment about schools on that "mid level" tier, but our main competition of Mussini, Zaga, has an excellent coach that regularly places kids in the NBA. Mussini can get the benefit of the lower compeition level, which will give him room to grow, with perhaps a strong chance to get in the pros.
All that said, the factors in SJU's favor are the style of play that Mullin wants to run (which I hazard to guess, as did Baldi, will be similar to Brey this past year at ND, which favors smart, sharp-shooting 1s, 2s and 3s) and Mullin's NBA background.