I think you are totaly right on your consumptions about the lag compensation and everything else except that rank doesn't say all about how good a player are, more how much he/she plays.
I written a couple of posts about the issues with Gears.
First the game connects to a dedicated server AND it connects to ALL the players in the game.
It then uses the connection to ALL the players to calculate the lag compensation.
So every game with 2 full teams will have 11 connections on each client.
There is no max of latency as BATTLENONSENSE youtube channel has shown.
BF1 has updated there game to only use the dedicated server as the index of latency, so if you have higher latency (ping) to the server then you will see everything more delayed but if you have better latency then you will see everything more accurate and your shoots will be more on queue.
And they don't allow higher latency than a specific number (think it's 200ms)
So the compensation will not impact your shoots depending on lagcompensation of players with bad latency.
They change it to the better.
Second the game keeps connections to older players which you had previous games with, see may older post for screenshots...
Increasing the network traffic on you connection.
You might think small packages don't affect your latency, but many several connections in a specific timeperiod do affect.
See my posts on this