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In general, the game will develop the player around some range of their skill ratings. There is a setting called Talent Change Randomness which will change players true talent level randomly (so Schoop could become a bust or a superstar). You can mess with that setting to make that happen more or less often as you would like.
Historical settings are different. I'm not very familiar with them, but I believe you can either have players develop according to their real life career (Babe Ruth will always be a superstar) or according to the OOTP development engine (Babe Ruth could be a bust).
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