Again, from an official KS HS ref that has done state HS meets (I think this person brings up many helpful and good insights into this discussion):

NFHS rules state that taking an injury time out for a non injury related situation is "unethical". Unfortunately there really isn't a prescribed penalty for "unethical" behavior on the part of coaches, fans, competitors, etc. Being unethical is a somewhat different classification as being unsportsmanlike, even though the two often can go hand in hand.

As an official I am not a doctor and even if I was I certainly wouldn't be putting myself in a liability situation by practicing my craft on the mat away from a controlled situation. In other words if a wrestler indicates they are injured either through physical or verbal indications it is "neccasary" to grant an injury time out even though that competitor may not be injured. Consider the situation if I were to make a judgement that a wrestler truly was not injured but was just breathing hard because he/she was in a close match and working very hard. I tell that wrestler that I'm not going to grant a timeout and I reset them and blow the whistle. 10 seconds later they fall over, pass out, and something terrible happens to them. Guess whose butt is on the line for that? Me because I didn't grant the time out.

On the other hand when I grant the timeout and the wrestler takes some time, gets a drink of water, and comes back out and then passes out, I am not responsible for that because there is no way I could have known that was going to happen.

Now what a competitor does with their injury time is completely on them. If they unethically take an injury time out, then they and their coaches bear the responsibility and consequences of that action. They might get a letter from the State or nothing may happen to them, but I've done my duty as an official and that is all I can do. As far as what competitors are allowed to do during a charged timeout that is loosely defined in the rule book. They can drink water, their coach can coach them, they can take a puff of an inhaler, etc etc. Years back there didn't use to be a time out limit on occasions and no penalties as such. Then along came the 1 extra point for near fall situations for defensive wrestlers who took either blood or injury time outs in those near fall situations. The injury penalty would be collectively dubbed the "cry baby" rule.