If `UPDATE player SET level = 'AA' WHERE team = 'Gophers';` is executed before the player swap, then why should "Stonebreaker" be upgraded to "AA"? I'd be pretty mad at my database if I sent those 2 queries in sequence and my DB decided to re-order them.
The sleep actually really complicates things here. I understand some queries run slower than others and the sleep is a useful tool to artificially slow things down, but now I don't know I don't know if I should interpret that as one command or two. If `WITH sleep AS (SELECT pg_sleep(5)) UPDATE player SET level = 'AA' FROM sleep WHERE team = 'Gophers';` is atomic then I'd expect it to put a lock on the 3 Gophers (which doesn't include Stonebreaker), wait the 5 seconds and then complete the update. The player swap would be blocked for those 5 seconds because it touches a row that's being updated.