We had this same dilemma last year with DD and will be wresting with it this year with DS. DD simply ended up listing the schools in order of what she truly wanted. She ended up listing 5 schools for both Army ROTC and Navy ROTC Scholarship. For NROTC, she was offered the scholarship to her #1 choice, which was her reach school, before we knew if she was admitted to the school. We were sweating out the admission decision, but were blessed when she was offered early admission to the school in December. When we went to visit the school in January and spoke with the NROTC unit, they had advised us at that point 17 kids had already been awarded scholarships to that school, but only 8 had been admitted at that point. He advised us that every year, they do have students who don't get into the school and do have to scramble to try to get their scholarships transferred. The problem, though, is that by the time they find out they don't get in, many of their 2nd, 3rd or 4th choice schools have already met their quota for scholarship winners, especially if they are a rolling admission school. So the offer for the scholarship may be pushed down to the last choice school. When we visited another very selected school, that detachment told us that they can never fill their quote of scholarships, as they typically have so many candidates who don't get admitted into their school. He suggested that even if that is their 1st choice school, to go ahead and move up the 2nd choice school that they believe they would definitely get into (and be happy attending if they aren't admitted to school #1) to the #1 slot. Then later on, if they do get admitted to the #1 school, ask for the scholarship to be transferred to the #1 school. I think it can be a crapshoot, either way, though.
For Army ROTC Scholarships last year, all of the award winners who were selected in the 1st round were all awarded scholarships to their top 3 choices. But once again, they had to make the final decision of which school they wanted to select, before the selective schools had made their admissions decisions. Last year I am not aware of anybody who was given more than 3 choices of schools, but some may have been offered less choice. My DD was not awarded her 4-year scholarship until the 3rd board. By that time, her #2 school, apparently had already reached their scholarship quota, so she was awarded the 4-year option to her #1, #3 and #4 choices on her list. By the time she was awarded the scholarship, she had already been admitted to all 5 schools that she had listed on her application.
I would talk with the unit/detachment of your child's #1 school and get advice from them. Find out if they meet their scholarship quote each year and if so, how quickly they do so. Find out how many scholarship winners typically accept the scholarship, initially, but then later decline them if they get into a Service Academy or choose another branch's scholarship. In that case, if you remain on their "waitlist" then you might be able to transfer the scholarship when that happens. I would also say, that if your kid is not selected in the first round of scholarships, keep checking in with your kid's top schools, to see if they have given out there allotments already, as you may wish to select new schools for the list or reorder the priority list of schools.