2016 - Big10 Champion and 2-loss Penn State got left at #5. The Big10 was considered the toughest conference that year. Not only that, but they beat #2 Ohio State head-to-head. Ohio State didn't win their division or conference and had 1 loss, but they had the best resume in the country with huge wins over multiple top-ranked teams like Michigan, Wisconsin, and Oklahoma.
Penn State's setback was getting obliterated by Michigan early in the season and losing to Pitt in a nonconference matchup.
The 2016 situation is not too dissimilar than if LSU won the championship game and got left out. Nonconference loss to a solid team (FSU) and getting obliterated by a top team (Tennessee). And Tennessee has the best resume in the country hands down - just like Ohio State did.
But LSU ain't gonna win. And Tennessee's resume should jump the OSU/UM loser. Then if TCU flounders we jump to 3, leaving the 4 spot to a 1-loss Pac12 champ, 1-loss Big12 champ, 1-loss ACC champ, or 1-loss OSU/UM loser.