The Dalai lama's havent been lineage holders so whether they practise or not doesnt directly affect students of lineage holders.
This is a good point that you raise, Zach. This is one of the core points of this debate.
Whether a practice is "valid" or correct or not is largely dependent on your lineage and what your teachers advise you to practice. You have chosen your teacher as your teacher for a reason and after much checking, validation and confirmation that this person can give you the practices that you need and which can bring you to enlightenment. (If not, why have you chosen this person to be your Guru to lead you to enlightenment?). If you have checked, and you have accepted this person to be able to bring you to Enlightenment, then it follows that you should also have faith that this person will give you advice that is correct and beneficial to you.
So if your Lama has received the Shugden practice (or whichever practice, for that matter), from his Guru through an unbroken lineage of practices that can be traced all the way back to beings that are widely acknowledged as enlightened beings (in this case, Manjushri), then you trust that this practice is CORRECT, valid and right for you. Then, whatever another Lama says (no matter how high he is in name), it should not affect your practice because your lineage is not with him; your lineage and samaya is with YOUR OWN GURU.
In this case, a person receiving Shugden practice from a teacher who has received this lineage himself through an unbroken lineage of highly attained beings is doing the RIGHT PRACTICE. On the other hand, for example, it may not be such a "right" practice for someone else, of another lineage, who has already been given advice, teachings and practices from his own Guru to follow. Of course, it is not that Shugden practice is bad, but perhaps in this case, this person has been prescribed pujas for him by his lama that are more helpful to him, at that time.
There are many factors to consider. You cannot judge a practice in such a simplistic manner. The element of lineage and teacher-student relationship are very crucial factors to consider also.