Rationality.
Do you guys know what that means? We can generally assume that all humans act rationally. There are exceptions, some individual and some systemic, but in the large aggregate people act rationally. Basically this means that people choose strategies that are thought to best lead to their wanted result. If you are hungry you will look for the fastest and easiest way to satisfy your hunger. This will suffice as an explanation for the sake of the argument I'm about to make.
The thing I want to address here is the disagreement about people farming gvg for rewards and the existence of smurfing on zq days especially. Your observations are not necessary to prove or disprove the existence thereof, I can put forward a theoretical explanation that verifies the inherent problem(and existence) of smurfing/farming.
The first premise is that people really want the in-game rewards being offered. This does in fact not apply to myself and possibly a few other people, but most people are in fact incredibly obsessed by even tiny rewards being offered in game. Just log in the game and you will see people going to great lengths to work on their titles and amass wealth. I think it is a fairly safe assumption to say that people will strive to obtain in-game rewards.
The second premise is of course people being rational. With regards to gvg and ZQ this means that if people see the possible reward from doing gvg high enough they will partake on quest days.
People will make a (possibly subconscious) mathematical equation of how they will spend their time in GW to achieve the best results. Here they will not only consider rewards in terms of pure pixels but also in terms of "fun", "personal achievement", "social interaction". This distorts a purely technical assessment as some unrewarding formats(for example AB) might actually be popular because they give other rewards than the purely technical output. (Otherwise JQ/FA will reward higher faction in terms of minutes spent)
But for most people the in-game rewards being offered will affect how they spend their time. If the gap was even higher, say JQ offered 10 zkeys per victory, AB and other outposts would nearly empty for people rushing to JQ.
So naturally by adding ToT bags and ZQ rewards to gvg will add incentives to play gvg. In addition you are rewarded for winning so playing with good players and against bad players will increase your rewards. Furthermore you will get higher rewards by simply completing games faster, adding to the incentive to play with good players and against bad players.
Now adding up all this this means: Top players will be rewarded for smurfing on lower levels since they a) will win more games and b) will win faster, maximizing their payouts of ZQ benefits.
Of course there are counter-mechanisms, by playing at a lower rating you get more boring matches, less opposition, less sense of achievement and a possible sense of shame as you discourage noobs and possibly scare them away from the format for good.
I see a lot of arguments about how altruistic and nice the gvg'ers are on the one hand and how rude, elitist and selfish they are on the other hand. A lot of people argue that in order for gvg to be better these people need to change their attitudes. Forget this notion right now! It is human to be human, we celebrate self-interest in most parts of the world as this is thought to create the biggest surplus in a market economy. Thinking we should be able to create a sub-society of altruism and selflessness in a game is naive to say the least.
The only way to fix this apparent problem is to start by acknowledging it: YES, people have incentives to smurf on ZQ days. YES, this drives people away and demotivates people. The question is is there a systemic fix that can reward people for playing at their level, ie. not smurf. Is there a way to entice more people to play gvg and perhaps more importantly to keep them motivated to continue playing.
There have been some good suggestions in this thread but usually they drown in the clamor for ToT bags and pointless bickering about whether smurfing happens or not.
And btw, if you had the stamina to read all this I have something uplifting to tell you: What I just told you about creating system incentives isn't limited to GW. In fact about all the problems we have in the world today can be fixed by creating or modifying systems and how they reward behaviour.