I also noticed this. In my 8way FFA with 3 galaxies, it was me + 3 in my system, 2 in another system, and 2 in the final system.
After I cleaned out my system (thanks Titan!) I went to the second system and cleaned them out as well. By the time I entered the third system, my titan was 5, and the winning AI in this system had a lvl 8.
What I don't quite get is, how is mine, after defeating 5 AI's, lower level then the one in that final system who had only been fighting 1 AI.