Last week Hawthorn coach Mitchell flew to Perth and met with West Coast co-captain Allen, who is a restricted free agent at season's end.
Amid a wave of criticism, Allen, 26, fronted the media and said he was "embarrassed" and "ashamed".
He kept the captaincy and has been supported by Eagles players and his counterparts elsewhere.
"That's an issue that in my view has been blown totally out of proportion," AFL Players' Association chief executive Marsh said on Tuesday.
"If anyone thinks that players aren't doing this all the time - and clubs, more importantly - then they don't understand what's going on.
"I don't think we're seeing clubs critical here, because they're taking part in it. The players understand this is what's going on.
"And typically what happens is players don't start talking to other clubs if they're being looked after at their club with the right offer. And without knowing the ins and outs of that, I think he had every right to go and talk to another club.
"And it doesn't mean that he's going to leave West Coast. I think that's something everyone needs to get their head around. It's appropriate that he's exploring what's out there, and hopefully he'll land on a good decision for him."
In the NRL, it is common for clubs to confirm players' plans to move elsewhere, while seeing out that season.
Marsh didn't expect to see that replicated in the AFL.
"Well, I don't, because I think what we saw as a reaction to Oscar last week is exactly why we won't," he said.
"And I'm even seeing like the Daly Cherry-Evans issue in the NRL (announcing his departure from Manly), I think you've seen greater backlash there for their players than what we've seen historically.
"So there's no incentive for the players to announce this stuff. As much as I personally think we should be mature enough to deal with this, this is the industry we live in.
"The clubs benefit - they lose players, but they'll gain players. So there shouldn't be outrage around this stuff, but there is."
Marsh indicated a captain meeting with another team was only damaging if a club allowed it to be.
"Every club is doing this. There's players doing this all the time, the players get this, so I think they respect each other as professionals," he said.
"I've spoken a lot of players in the last week about this issue, and they are wondering why such a big issue is being made of this because it's happening all the time.
"It doesn't just get to the end of the season that a player then moves clubs. These conversations have been going on all the time.
"So I like to think we're a mature enough industry that we're not allowing these types of issues to damage culture."
