It still is unlawful discrimination to treat Canadians different from Costa Ricans based on their nationality. That's why they had to come up with criteria that gives domestic status to a small number of players based on their longstanding relationship with MLS academies, not based on their nationality. A Costa Rican who came up through an MLS academy and signed a homegrown contract would also get domestic status under this rule.
I guess that old saying, "Colorado Rapids fans have had to deal with every misfortune apart from an outbreak of the plague" now has to be updated.
He'd likely have at least a green card. But the US laws against discrimination based on national origin don't have exceptions based on the age of the person. This seems like another piece of evidence that the USL isn't breaking the law by treating Canadians of any age as domestic players on US teams as some have claimed.
The point is that there's no decision being made due to the national origin of the player or the age. If you're a homegrown player you're a domestic, if not you are either an international or not based (essentially) on your need for a visa or not.
There are millions of people in this country who aren't citizens and don't have green cards, and I would guess there are some such people who are teenage boys in MLS academies even today. The thing about it is that even if it illegal, it's not going to be adjudicated unless there's someone who has an argument to sue over it. To sue, someone needs to allege he was specifically harmed, not just that it could harm someone somewhere. So it would be a fringy minor league soccer player who happens to be on a USL team that actually has a Canadian player, and then he gets cut and blames it on this regulation. It can't be easy to prove that in court, where the coach can just say he wasn't good enough. And a cut-from-USL player from another country probably has better things to do than to get himself tied up in an American lawsuit.
Err, I'm saying the USL is safe in distinguishing Canadians and Americans from Costa Ricans. Both due to the business neccessity of dual sanctioning from CSA and USSF and an article in the NAFTA treaty which promises what amounts to most favored treatment to citizens of each of the signatories working in each other's countries.