You have to keep in mind what a rating is. A lot of people misinterpret a rating as a measure of your skill level related to the course. Your rating is produced in part thanks to your skill level relative to the course, but that isn't what the rating is. A rating is a measure of how you play relative to the rest of the golfers on a given day/given conditions. Your rating specifically depends on how other players are doing, and is nothing more or less than that.
My question would be why is it this way? As an example, if you are 950, McBeth is 1050, and I am 850 and we play same tourney, same tees. We all shoot 54. If that's the best or close to the best score in the round, it'll probably be rated 1050. The next tourney McBeth isn't there, and you're 950 is the highest in the field. Again, we both shoot 54. It'll be about 950. In golf if I shoot 72 on a course rated 70.8, it's going to be a 1 handicap...no matter who else played that day. Aren't we all playing against the course, and not the field????
A rating IS a measure of how you play against the course. The measure of the course is dependent on - but not a direct function of - the scores of propagators. The round rating is therefore not a function of all the scores of the other players.
The difference from golf is that the 70.8 is determined (largely) by measuring the physical aspects of the course - it is almost entirely based on length. The analogous number for disc golf is SSA, which is determined by how all the propagators play.
Golf can use physical measurements because all the courses are so stultifyingly similar. (Plus, they know it's not very accurate and don't care.)
That would never work for disc golf where the length of a hole only explains about one-third of the average score, and where holes change over time. (Can you imagine a golf hole where one branch could fall and open up a new preferred line to the green?)
So, the score and ratings of players are used to measure the course that round: the SSA. Then, each player's rating is based on their score compared to that SSA. That would mean the formula forgets who else played the hole after coming up with the SSA.
So, it's basically a real-time way to assign that 70.8 number. If I understand it correctly, which I may not. I'm a ratings formula enthusiast, not expert.
Now, for the rest of the story.
This intermediate step of setting ratings against the course's SSA instead of against all the other player's scores is crucial. All formulas I am aware of which would directly use other player's scores would result in ratings for all players trending toward a single average rating for everyone.
Try it for a simple case. Find the best-fit line of ratings to scores, then apply that linear formula to the scores to get round ratings. Use those round rating to set new ratings, etc. Do that for just a few rounds and you stop seeing any high or low ratings.