Question: Can a Division 3 college take back any scholarship given to a freshman to play sports if he or she doesn't make the team sophomore year?
Division 3 colleges do not offer athletic scholarships at all. So any money awarded to a Div. 3 athlete would be based on financial need, academic talent or other (non-athletic) abilities. Thus, if the student is cut from the team (or simply decides not to participate) there would be no impact on the scholarship.
Note, however, that sometimes Div. 3 colleges do a scholarship "end run" for athletes. That is, if a student is a recruited athlete, the school is not allowed to offer money for sports. But the school IS allowed to offer the student merit money that is labeled as being for other purposes. The school can also "sweeten the pot" by providing a need-based financial aid "package" that includes less loan and more grant (the good stuff that need not be repaid) than a non-athlete might receive. But, again, if the athlete doesn't continue in his or her sport--for whatever reasons--the school cannot rescind the scholarship because of this.