I'm still confused as to how teams are rate and how matchups are picked. Can someone please explain this to me?
Depends on the mode. XP level means nothing. BR and events are based on your current run only. The best player in the game and the worst player in the game could match up if they both start searching at the same time and are on their first game. In ranked season you are matched up based on your point rating during that particular season. For all game modes, the further the bar fills to the right, the more likely you are to match up with someone who is further away from your rating.
*I forgot to mention rating mod means nothing unless that was turned back on and I missed it.