There are definitely bugs in Zwift.
I bet that first place rider either didn't do the course or had a software issue where Zwift thought s/he was riding when they were not. I've seen a clip of someone not on their bike, bike is stationary, but Zwift is showing them going 40 or 50 mph. I know that until recently if I was pedaling softly while Zwift was loading, Zwift would over read my power. I think my pedaling was considered "zero" but the power reading from the SRM was used to calculate power. So I'd start rolling along at about 100w, not pay attention to screen, then look up and Zwift has me at 250-300w, which for me is a VO2Max effort. I'd stop, let everything go to zero, start riding, and it would be fine. I'm aware of this so I keep an eye out when starting Zwift rides; recently it seems that this got fixed as I haven't seen it happen in a month or two.
Because Zwift is the Wild West of power/weight/etc, a lot of "more serious" riders use Zwift Power to get the "real placings". Requires HR, powermeter of some kind, some other stuff I think?
My best recent ride I avg 203w (26min), I was at 2.5 w/kg, and I got 2nd in a D race. However, at the line, pretty much everyone was over 3.0 w/kg (max is 2.5 w/kg) so in ZwiftPower I'm listed as first. Thing is that in real life for me to avg 203w is really, really hard, and I was cramping and in all sorts of trouble 15 minutes into the race. I had to use all my tricks to try and stay in the group for another 10 or so minutes. I was pretty cooked in the sprint, afraid of cramping, so I went early and hoped that people wouldn't go with me and then go around at the end.
https://www.strava.com/activities/3296024835
In an earlier race (the only other one I "won"), I was probably 5 groups back from the front, like I was getting shelled over and over again. A group caught me that was more my speed, I stayed with them, and ended up "winning" the D race to my total surprise. That was 192w, and definitely wrecked me (43min long). The C race winner did 3.4 w/kg, 1 w/kg more than me, which is insane. I was well below that in FTP when I upgraded to 2 (3.1 w/kg).
https://www.strava.com/activities/2874725466
I generally don't race because I can do well in a D race and I can't do anything in a C race. If there was a shorter 3.0 w/kg limit race I'd consider it.