I have clearly already identified in the original post that the optimal strategy for me is to purposely not do as well in the league as I am able to. That is not the issue, the issue is systemic. As you are the 7th best person in your league, but it's better for you to not advance, which is a problem.
I will maximize my rewards regardless of what the developers implement; however if the league system is supposed to reward people for moving to a higher tier, thus facing harder people, then players should be rewarded for that, not punished. All the current system does is promote this weird sub game around the 75th and 15th breakpoints where people who could move up purposely do not because that is better for them. As this is the suggestion forum, I posted here to suggest that the rewards be re-balanced such that it is never a punishment to do as well as you can. After reading your post, it tells me this is not even a problem with the area around 75th place, but also 15th place. This tells me that more balancing is required than my initial suggestion. It might mean that the lowest tier of the next league should give the same rewards as 1st place (or 2nd to 4th place) as the previous league. This obviously would also have to come with a reduction of rewards for the lower leagues to balance the overall rewards from the leagues.