Kind of came to this realization a while ago, but....I think we all overstate the problem of Johto Pokemon not being used by leaders, or notable trainers in general, in the Johto games
Of the 8 Johto leaders, half of them use Johto Pokemon and they're even their ace.
All 4 members of the E4 use Johto Pokemon
5 of the Kanto leaders use Johto Pokemon
Like, the Johto leader rosters could tsill be better don't get me wrong. There's really not a reason Misdreavus couldn't have been on Morty's team is the primary one that everyone brings up, Bugsy could have swapped the cocoons out, not to mention Chuck having 2 Pokemon is ridiculous, discussion of levels goes back to GSC's level curve problems....
But the way we as a community talk about it, you would think that we had Miltank & Kingdra and that's it.
This. The problem is more of the viability of the Pokémon rather than the availability of the Pokémon. My only real nitpick is why Bruno still has an Onix even though a Gym Leader (Jasmine) uses a Steelix. His two Onix in FRLG are even evolved in the postgame rematch, so what the heck happened here? Did one of them de-evolve over the span of three years or something?
Also, I think the cocoons are meant to be a reference to how Bugsy wants to pretty much be a Bug-Type Pokémon professor, so maybe he’s studying evolution or something.
Pivoting to a different thread for this reply (because it'd divert the thread it came from too much) to agree w/ this and defend the Johto leader teams for a sec. I've put a fair bit of thought into retooling the Johto leader teams over the years and I think their lack of representation on the whole is less to do with flavour and more to do with stats. Viability is definitely the issue here in most cases.
Falkner
So for Falkner there's not really a better choice than Pidgeotto - he's got to be better than all the crappy NPCs who already use Pidgey, and assuming you want an ace Pokemon on a similar level to Onix you basically have to go 2nd stage (keep in mind that although Onix has a pretty astronomical-looking defence stat of 160, Bulbasaur, Squirtle, and Butterfree - and even Charmander to an extent - can all capitalise on its terrible Special stat. Very few other Pokemon have such a lopsided stat spread you can exploit that way). So Hoothoot is out, and Noctowl is way, way too bulky for that stage of the game even if it was ridiculously underlevelled. It sort of proves the point that his Pidgeotto is so underlevelled as it is.
And you probably want a Normal/Flying mon because anything else makes things a little too complex type-wise. Farfetch'd is about on par with Pidgeotto and I think it actually would have been serviceable. Honestly there's not much in it but maybe Farfetch'd just didn't seem impressive enough for a Gym Leader's ace. In my hypothetical Johto do-over, perhaps Farfetch'd is used by one of the gym trainers or something while Falkner would use Hoothoot in place of his Pidgey but keep Pidgeotto.
Natu, Spearow, Delibird, and Doduo are all too weak while Murkrow is a little too strong, and given that Falkner specifically trains bird Pokemon anything like Zubat or Ledyba is out; they also wall Chikorita even harder than Pidgeotto does. Skarmory would have been out of the question as it's far too strong - only Cyndaquil and Mareep would be able to beat it - and Togetic wouldn't be appropriate as it spoils the story of the Mystery Egg.
Bugsy
Then when it comes to Bugsy, again Scizor is too strong, and tbh Scyther is only really manageable because he has the cocoons with it. Unless you're using a Geodude or Onix Scyther is a pretty brutal foe - moreso in HGSS but even in GSC if it gets a couple of Fury Cutters off it's nasty.
So maybe Pineco or Ledyba would have made his team a bit too difficult. His Kakuna can at least poison you, though. In my hypothetical do-over I'd probably keep the cocoons, but maaaaybe you could swap Metapod for a very passive Paras that enfeebles you with status instead.
Whitney
Well, this is the one everyone likes so not really many notes here. It could be asked why she doesn't use, like, Aipom or something but given that Game Freak nerfed her Miltank in HGSS they probably felt that a third Pokemon on her team was pushing it.
Morty
Okay so I wanted Morty to use Misdreavus as much as anyone. I don't think we'll ever see another gym based around one single evolutionary line again and frankly I hope not.
Everything about Ecruteak Gym is cool except the Pokemon they use. Seriously, if Saffron Gym can use Ghost-types why the fuck can't Ecruteak Gym use Psychic-types or Dark-types?
Anyway. Real talk though: it's kind of easy to forget how weak Misdreavus really is considering it was a fairly serviceable wall in Gen II/III but it's far, far weaker than Gengar. And it'd look really odd to have a cool new Ghost on his team and for it not to be his ace.
So, I kind of get it, even though it's disappointing. The remakes should have changed it though.
Chuck
Chuck is actually the one where it's the exception that proves the rule. Because Poliwrath works really well for him as an ace: it's Water, so suits the vibe of an island gym, it's far stronger than Hitmontop, and it gets Dynamicpunch and has a whole strategy around being able to actually make it hit reliably, which no other Fighting-type can do.
And yeah you could have Hitmontop or Heracross as his first, but the same logic goes for Morty as with Misdreavus. It's also rare to have two dual-typed Pokemon - Primeape isn't used by anyone else so Hitmontop was reserved for Bruno. Heracross learns no decent Fighting moves in any case.
Jasmine
Jasmine's a weird one. I don't know why she wasn't given a Forretress or a Skarmory, beyond the fact they share types already used by earlier gym leaders.
Beyond that, her team reflects Steel being a new type - Magnemite changed from a sole Electric-type, and Steelix is the evolution of an older Pokemon. I would at the very least though have evolved one of her Magnemite: Magnemite-Magneton-Steelix feels more natural, and is the same progression as Pryce's team.
Pryce
Pryce I think was simply an attempt to be different from Lorelei. They spread all the Ice-types out - Sneasel is a special Pokemon only used by Silver, Jynx is used by Will, and Lapras is used by Misty. Meanwhile Delibird and Smoochum are too weak.
That leaves Piloswine, Dewgong, and Cloyster. The latter two could conceivably both have been on his team, but they share a type and Piloswine, Cloyster, and Dewgong might have been considered a shade too strong for the fifth gym leader. My Johto do-over would have fixed Pryce in place as the seventh gym leader and given him the strong team he deserved.
Clair
And then with Clair - there's not much you can really do here. Gyarados is redundant (I'm baffled as to why HGSS gave her one). I've always thought that Nidoqueen and Feraligatr would fit aesthetically and mechanically for Clair, but three Dragonair and Kingdra is much harder than it looks because, at that point, you are unlikely to have a Dragon-type of your own; best you can do is bring a Jynx or a Swinub from the Ice Path. Kingdra legit seemed to have no weaknesses to me as a child.
Would I do things differently I were the director of HGSS? Yes, yes I would. By that point the Johto species shouldn't have been secret and hidden away like they were in the originals. But when you look at what they had to work with in GSC, it starts to make a lot more sense.