In your friends case, there is a level 22 team in that CL draw since there weren't enough teams available at either his level or the level of his to fill all champions league spots. If a manager abandons his team but that team still finishes in the top 4, the team will seize to exist and only 3 teams will earn a spot in next seasons Champions League. Since one spot is vacant its can be filled by a team at a different level.

Regarding the level 8 manager, that's his manager level not the level of his actual team. When a higher level manager chooses to take over a lower level team, his profile picture shows the highest level that he managed at.