Re: number of K1 players. I don't understand how your data is better than looking at the leaderboard ranking of someone with 3610 SR. You even said yourself that it includes people still inK1 that have been squished out of the SR range.
I generally agree with your statement about "how the system works". I hadn't thought of it that way before.
Nevertheless, K1 is being shrunk faster by CG than the distribution/system is re-inflating it. And I think it would be nice if CG addressed (or at least acknowledged) the issue.