While it may decrease the work they need to do to keep it private, an ideal system would be very difficult to game. If you can climb while not actively helping your team to an adequate level, that’s something that should be addressed instead of hidden. (DPS moira comes to mind, with her amazing performance based SR gains at low ranks yet frustration provided to teammates.)
Tough to say the exact cause, but it seems to boil down to MMR not being integrated given where everyone placed and the comment by Bill Warnecke. Whether that’s due to it being improperly linked to the dataset, omitted in the calculations, or some other oddity on the back end… it’s something that should have easily occured during testing. It didn’t affect a small portion of games under specific and hard to recreate circumstances, it was everyone.
D: They tested it, and their QA team is good, and the problem didn’t show up in test environments.
E: The beta season was the test, and this was an automatic rollover. The problem didn’t show up in the beta season, and something was different with Season 18. (Note there was not a client release at the rollover time)
All of your 3 options assume Blizzard is incompetent. Defects making it into complex client / server applications is not a sign of incompetence. It happens all the time to the best software companies, they’ve just gotten very good at making it so fewer people notice problems.
It is cost prohibitive (I said impossible before edit) to fully test software. It’s always released in a state of “tested enough to have a high degree of confidence”, not fully tested.