Ok, you edited slightly, so let me give you my point of view.
Judging a team’s calibre by the quality of the teams they play is one way to rate - but there are a few caveats. For example - how good is a team playing another that is decimated with injuries? What about weather conditions - does it matter? Do you take it in consideration? What about ‘form’?
Form is a bit of a flighty thing, because much like the rating system we’re discussing - it is subject to the win/loss performance against other teams - the opponents ‘form’, and variables and conditions surrounding that specific performance. But let’s take ‘form’ to mean - ‘how well a team is playing in general, at the time’. If we can agree on that loose definition, Essendon are top 4 in the comp, on form, since the Carlton loss. Now - you can say that regardless - we are sitting in 11th spot - and technically - Collingwood hasn’t beaten us at ‘#4’ or even ‘in the eight’. But to my mind, that would be a spurious argument, because it does not hold true to the actual purpose of the rating system we are talking about.