But if I wanted to transfer in an English player in 2010 the game would let me go in there though. Does that mean that teams in closed leagues do not transfer players, amoung themselves? And how does the game decide who makes the Champions League if they don't track the closed leagues
Clubs from inactive leagues would still transfer players. Though the amount of players which are loaded from inactive leagues, and the level of transfers/detail from these inactive divisions would be less than if you selected them.
If you selected just an league from outside europe then then the champions league wouldn't be selected or simulated.
If you have never played FM2006 before I suggest you get the free demo and give it a try
