Wolves were handed a suspended £25,000 fine after boss McCarthy made 10 changes for a league game against Manchester United at Old Trafford last season and the former Republic of Ireland manager is "convinced" Blackpool will also be handed some sort of punishment for making 10 changes for the game at Villa Park.
But he hopes Holloway does not carry out his threat to leave the Tangerines if the Premier League intervene, and said: "Ian has earned his right to be in the Premier League. He has brought something to it, his team have graced it so far. I think they've been great. I wouldn't want to see him quit over this (team changes). He'd be mad."
He added: "But they will 'do' him, I'm convinced. If they don't, then what was all that I went through last season about?"
McCarthy believes Holloway - like himself - should be able to field whichever team he feels is suitable.
He said: "I don't think it's wrong (what Holloway did) because I think you should be able to do what you want.
"I was told in no uncertain terms that we couldn't do it at a Premier League meeting at Villa Park where all my arguments were shot down."
McCarthy has massive respect for what Holloway has achieved in the game.
He said: "We go back through football and management. Similarly, we've always both had to scrap for things.
"I've always had the utmost respect for the way his teams played."
Source: PA
Source: PA