I kind of like talking about this stuff, and im going to throw random thoughts.
First of all to answer your question of how it works. It just makes the team average mmr very similar. so it will be team1_mmr ~= team2_mmr.
a 49% win rate still means you lose more than half of your games.
This statement is a fallacy. a 49% win rate means **on average ** you lost more games than you have won. I was taught to be a stickler to how things are stated. This number is blind to what will happen, and a win rate will change with every additional data point added.
These are numbers, and they do little to asses(assessment? can't spell :( ) a persons skill level, and tell absolutely nothing about how a person will improve.
Its not the most perfect thing. I personally think that riot can perhaps improve the queue by looking at more things than mmr, like competency level at the game split into tiers. I would not judge a silver person on the same level as a platinum. The current system is just a large wall one has to climb, and once they are there they will be matched in more competent games where everyone knows how to team fight and stuff.
If you have a win rate higher than .5 and hold it constantly, then you will get too a higher tier. Though the question is how long.
I have been thinking about it for a long time before this thread, and what matters is not the win rate, but the significance of the win rate. I am just writing some incomplete "rules" describing this problem
I wrote this while thinking about it.
n//number of wins
r//win ratio
round(abs( n(1-2r)/r ))
//I can't write more complex notation in this chat so i can't write it completely in one summarized line.
This essentially gives wins - losses
so 100 wins with a 50% win rate will be 0
300 wins with a 52% win rate will be 23
1000 wins with a 70% win rate is just impossible at 571
There clearly is some metric where we can say its impossible(nearly not to see that its impossible, but just so improbably that its absurd to think its possible)
I would also consider winning 10 ranked games in a row improbable.
I would consider having a win-loss difference of 20 really good. This is the point where my personal bias would consider this person skilled. When doing a game I have evaluate my opponents to guess how " skilled " my opponent is with win loss difference along with their initial game play and lvl 6+, and 8+ game play.
I kind of have an odd way off looking at my opponent because if I assume they play anything like I do, then initial evaluations are useless. I purposely play like an utter noob, and make mistakes. It does not matter as long as my two initial objectives are complete. Take minimal damage, take no turret damage. It does not matter if i miss early farm because I will catch up in it anyway. Though it usually is better to farm if you can. Its only in extreme cases where I would opt to giving up all farm.
Wins and losses fluctuate rather evenly.