How does matchmaking works?

It doesn't work.

In all seriousness, mmr has been loosened, presumably to deal with queue times. So... it is kind of like the old days again. It is like a hazing ritual, you place new players against people with hundreds upon thousands of hours and voila, they are hooked.

Ranks dont make matchmaking anymore. However a week old player shouldnt be matched against people who play long enough to have full builds of perks fr multiple characters.

You are matched by an invisible number which is calculated from your killers kills or survivor escapes.

However the system is ######### and its matching whoever it likes with whoever waits long enough

It doesn't.

But seriously, for one the algorithm is utterly incapable of tracking how good of a player an individual is and as such any "balancing" it does when setting up a lobby is nothing more than lottery. And two, even if the MMR was somewhat indicative of skill (it's not), the number is just flat out ignored for faster queue times anyway. As long as 40% of matches end in a 0k and 40% of the matches are an absolute massacre of 4k, the devs can just pat themselves on the back for balancing the game so well.

So to go into detail, you are assigned a hidden Matchmaking Rating (MMR) that goes up or down after each match. If you’re a killer, it goes up if you kill someone and down if they escape, and vice versa if you are a survivor. How much it goes up or down depends on other factors like how high or low your rating is compared to the opponent and (I think) whether someone was the first kill versus a later kill (since once one survivor dies it significantly increases the chance of later survivors also dying, so that first kill carries more weight in the MMR shift). You’ll have one MMR as a survivor, and you have a separate MMR for every kill character you’ve played (since killers are so different from each other they get individual ratings or at least individual modifiers on the ratings)

With that MMR in hand, the matchmaking system then tries to put you in lobbies with other players of similar ratings. Generally speaking, if everybody in the lobby is around the same MMR, the match should be fairly close with a result of 1-3 kills most of the time and a statistical average around 2 kills. And from what I can tell in my own games, at least, that seems to be the case.

Now that being said, even assuming the MMRs are accurate, there are still mismatches for a few reasons, some of which are unavoidable

• As a brand new player the system has to give you an artificial rating since it has no idea if you’ve played before or if you’re actually totally new to the game and no idea what you’re skills are generall at video games. The devs indicated in their last update they feel the initial rating for brand new accounts is probably too high, leading to new players being put against “average” players who could stomp them, so they were (or maybe even already have) going to reduce the initial setting.
• Players who have ratings on the tail ends of numbers aren’t as likely to have opponents in their bracket to go against. So eventually after waiting in queue a while the system ends up having to just out them in whatever lobby is available. This is kind of unavoidable since the alternative is having people with very high or very low MMR sit in queue for really, really long wait times. But this does mean people with really high or really low wait times can end up getting shoved into mismatches, especially if they’re playing at non-peak playtimes.
• Survivors also like to play with friends (aka survive with friends or swf), and there are a lot of swfs where one high rated survivor is grouping with a low level buddy or two, which gives you a mismatch in the lobby. This is particularly tricky for the matchmaking because simply taking the average of survivor ratings probably isn’t the best estimate of the rating the killer should be to provide a close match. My guess is calculating the net rating of a group of survivors could be where the system might be least accurate aside from the new player initial rating above.
• Lastly if you have a lobby, and someone leaves it, the system prioritizes grabbing a player as soon as possible for that lobby to prevent the players from waiting any longer. Which means it could be filling he gap with pretty much anybody regardless of rating, it’s just whoever is available at the moment. So if you actually want to help the game make close matches please don’t lobby dodge, you’re just setting up lobbies you leave for mismatches.

One more point I almost forgot to mention, the Grade symbols you see on the endgame screen have nothing to do with matchmaking at all. They’re a relic of the old matchmaking system and are just used now as sort of a monthly tracker of how often you play more or less. If you play a lot of games, and do reasonably ok, you will slowly climb up to the Red Grades and, at the end of the monthly period, get nice bloodpoint rewards based on how high that Grade is (up to 1 million each for both your killer and survivor grades). Then each month all those Grades reset all the way to bottom and you start again. So it’s quite possible to have excellent players have really low grades if they simply haven’t played much this month, and have kind of bad players have really high grades if they play a lot in a month but aren’t getting too much better over time. So while there’s some correlation between high Grades and being really good it’s not as strong as you might think.