One of my fantasy baseball leagues has the same problem. You get lazy manager who dont know or care to check which prospects belong to another team and which ones are actually on the waiver wire. I don't know of any way to protect or restrict certain players.
As far as extending the bench, ill assume not all prospects are in the player pool. which means certain teams wont have a full bench and probably abuse that by picking up extra players or something.
The way my league handled the problem was if a team picked up someone elses prospect and dropped it before the commish noticed, and do not play the prospect, its no big deal or penalty. if they have the prospect long enough to notice and the commish has to drop the prospect for the team its a warning. second time they lose a draft pick in the next prospect draft. whether its a pick at the top of the draft or bottom is up to you. we lose a bottom pick. finally if the team uses someone else prospect and gets points or stats its an automatic draft pick loss.
eventually your problem managers will get the picture or get pissy and leave. either way hope this helps