only XL-6

Actually, what's the point of being in a group if you lose twice and can't progress further (although, of course, it's possible in a group that everyone is equally bad and they keep losing to each other in a cycle). In that case, a group of 7-8 people gives a chance to progress even after losing a couple of games.
But still, the proposed system is also good; it will immediately weed out those who would play in a group without motivation, knowing that they can't progress further, but still need to play all the matches.