In a recent Div 3 contest, I was able to solve 4 problems in 59 minutes with 3 wrong submissions overall. People who have solved 4 questions in more time than me and with more (>3) wrong submissions, are ranked better than me and have lesser penalty. My rating was calculated on even greater rank than actual. I was very strongly expecting an increase in my rating (which I should) and have got a decrease instead. I don't understand whatever this is. My rank on the standings page is 3642 and my rating is calculated on the rank of 4234. Would appreciate some genuine insights on this.
Where did you get the 3642 from? (edit: yeah, probably trusted participants)
The reason that your rank is so low is because you solved all problems quite late into the contest; your time penalty is very high, so you are ranked at 2588th out of 3160 participants who solved 4 problems. It isn't a good idea to submit 4 problems at the same time; just submit as you solve.
I think he got it from the trusted participants standing — quite unfortunately, though the feature is well-reasoned, it is misleading as well. You can see your actual rank during the contest on the Friends Standing tab.