it's not a bug.
As the CH.L. draw starting from the top teams of the server, creating CH.L. competitions of 32 teams, when the teams of a level are not enough, it can pick some teams from the level below, to complete a CH.L. of 32 teams.
Your team was in that "border".
I know, it's not fair because those aren't the (level above) teams of the Cup where the quality is low, but strong teams with active managers.