Yeah it is, but that's how a seeding system works. Not convinced they should be doing it like this though.
That was my thinking, I would say it gives an unfair advantage as you would expect a championship team to beat a L1 or L2 team usually, so by rights all Championship clubs should get through to the next round and a chance to earn more with the lower league teams knocked out in R1 hot having that opportunity as it is not a level playing field, it should be an open draw for anyone to draw anyone.