MMR System bug?

Queued with some friends and hit 3rd (Gold I 0LP). One of my friends was Gold 2 when the game began and the other was Bronze II. I finished 3rd, Gold II finished 4th (And promoted to Gold I), Bronze II finished 6th(Gained LP). I was demoted even though I finished higher than the friend who promoted to Gold I. If I were to guess its due to the MMR system believing that I should've won the game as my MMR is around high plat/low diamond. However, I think that is a poor way of deciding LP gains/losses and possibly a bug that makes climbing overly punishing for players with MMR above their rank.