This is not the first time people are confused by the pairing methods for tournaments. A document that actually describes what they do would be nice…
Nevertheless I think that this behavior of the “slaughter” pairing is a bug. According to senseis ( Group Pairing at Sensei's Library ) the strongest player should play against the weakest, second strongest against second weakest etc. So in our tournament Play Go at online-go.com! | OGS I would have expected the following matchup:
according to the way it is described on senseis, all 1kyu and 2kyu players should play against 13 kyu or weaker players (in this case). around the median (8kyu to 9kyu) a match of about equally strong players should happen - but definitely not at either end
EDIT: The confusion you mentioned is about fraktional ranks (0.5kyu vs. 1.5kyu etc.) if I understood it correctly. That effect is much too small to explain this.