Getting old with the GP disparity - every level is having this problem besides Kyber 1

SR is a function of one's past win/loss record. All it means is that when two players with the same SR are matched up, either of them would have 50% math expectation to win (which is, by the way, the definition of "fair game" in game theory). That is obviously not true in all cases, but a prediction based on the players' histories. Since the underlying model is Bayesian, the more battle results an SR has incorporated into, the better the prediction is.