UW's upset of PSU happened when it had two starting guards. It no longer has that and this should be taken into consideration for the tier they are in. I think they belong in the bottom right now, in all honesty. They are playing walk-ons.
Where it gets hard for UW is that essentially whether they're in Tier 4 or Tier 5, they'll still remain at +1 variance based on games played to date. It really doesn't matter either way. Their upset of PSU doesn't change no matter where they move, and all their other B1G games to date would be equal for either tier.
And going forward they've got @ Purdue, v Illinois, @ Iowa, and @ MSU coming up. Whether they're Tier 4 or Tier 5, they are predicted to lose all of those games except Illinois. But there's no tier they could be in that losing at home to Illinois isn't negative variance, so Tier 4 or Tier 5 doesn't matter there either.
After that, they've got a home-stand against Nebraska and Northwestern, two games they're expected to win whether you put them in Tier 4 or Tier 5. Then road trips to Maryland and Illinois, where they "should" lose whether Tier 4 or Tier 5.
The first game where Tier 4 or Tier 5 matters is Feb 11 vs Michigan. As Tier 4, they're expected to beat Michigan at home. As Tier 5, they're expected to lose to Michigan at home.
I would say that for now, we simply leave them where they are. They have a +1 variance which we can discount because of subsequent injuries. If they lose at more than one home vs Illinois, Nebraska, or Northwestern, then we should be talking about dropping them. But given that we don't truly know how good or bad they are, I don't see a point to changing them now.