They don't look competitive, they actually looked like a complete dumpster fire against Serbia (likely the weakest team in the tournament), other than the obvious skill their top forwards have.
They have also been promoted at the senior level just because Poland completely dropped the ball. And because they started naturalizing people, their top goalie was Slovak and top scorer was Ukrainian, another Ukrainian tied for 2nd in scoring. Having pro teams allow you to do that, not so much at the U20 level.
Having said that, their hockey was never as bad as it looked, it should never be anywhere near D2A at senior level, it's miracle countries like Lithuania or Estonia manage to keep above them, for the most part. The money was always there, somewhat. Their hockey structure is at the level those countries can only dream off, they have 5 borderline fully professional teams, play in Erste Liga, their kids play in Hungarian junior, etc. One could say structure-wise, their hockey
could be on par with Hungary's. But therein lies the problem at the senior level, most of Romania's best player come from Miercurea Ciuc and are ethnically Hungarian. The relationship between the state, coaches, federation with that minority is fragile. In the disputed region hockey is pretty much minority sport much like it was in the Baltic states/Kazakhstan in the Soviet days and it produces 80% of Romania's player despite none of the pro teams being in the region. Naturally, a lot of kids also simply choose to play for Hungary too, you can see kids born in Miercurea Ciuc every year on the Hungarian U20 roster (
for further reading how it got to be that way).
There are also some other frictions like one between two biggest teams - Corona Brasov and Csikszereda. Romanian hockey has been riddled with disagreements for years so long story short, they pretty much never have their best roster, there might be as many as 20 top players missing from it some years. Like the 1st year they played in D2A, nobody suited up. Someone like Zsombor Antal, despite being one of countries best forwards, hasn't played for it since 12/13. And even though that's an extreme case you can see pretty much none of Romania's top players really play for the NT every year, Gliga being the big exception. So if you are the GM of Romanian NT you really have work cut out for you. At full strength, they are definitely closer to the top of D1B rather than the bottom of it.
But at the U20 level they are really weak. Year after year, they have some top guys who are ok but their development system is really weak. Very few kids leave the country to play against better competition abroad and those who can make Hungarian NT mostly do it, if they are given a chance. So what's left to Romania is the group that doesn't really have any outstanding talents (no Kirk, or Rooba, or Armalis, or whatever), their best players have never reached the level above a decent Erste Liga pro. And on the bottom of the roster there are guys who are terrible. Who played in Romania (not Hungary) locally and are on par with Croatia or Serbia maybe, but not the real hockey countries. Also, they have never had a competitive goalie at this level, ever. It's a big deal, Asian teams always have this problem, GB now pretty much failed at every level despite having a very talented group (and they only won U18 division in 2018 because Poland dropped the ball,
again, and couldn't beat Estonia), Lithuania had some relatively big success by having good goalies, etc. So at U20 they are not a particularly deep team with a bad goalie being carried by somewhat mediocre top guys. This year all their top guys are 19 and the team still looks meh at best.