Ok thanks, that makes much more sense, I thought it was a mistake but you confirmed it.
The system they use for giving a first rating is imperfect. It does sound like they messed up in the instance you mentioned. He should have been given a rating that was approximately half way between the highest player he beat and the lowest player he lost to.
But, if he lost to the 1900 player before he played the other players, he could have been given a rating based on that.
But if a 1700 player comes into a tournament and beats several 2000 players and does not lose to anyone lower than say, 1900, they will automatically adjust him up to about the rating of the lowest level player he loses to and then give him the points he would earn for the players he beat and take away points for the players he lost to. So, that 1700 player, say he plays in a tournament and plays 10 players and 3 are under 2000 and he beats all of them and 4 are between 2000-2100 and he beats two and loses to two, and then there are 3 players over 2100 and he wins against 1 and loses to two, they would automatically adjust him up to about 2025 and then give and take away points based on his wins and loses.
Whereas, if he was 1700 and won half his wins vs players in the 1700 range and lost the other half but had one impressive win vs a 2100 level player, they would just have him earn and lose points based on his opponents and the win vs the 2100 player would give him about 50 points where as a win to another 1700 player would give him something like 2 points and a loss to a player who was 1400 would lose him about 50 points.