So, in my understanding, here's how it works. At the end of the season, the league winners are automatically promoted. After that, all the free spots in the higher division are filled by the teams with the best records in the lower one, no matter how they performed in the playoffs.
This is correct. Promotion, however, is conditional on whether there are bot teams remaining on the higher level, as lucky losers will only replace bot teams.
"I don't know half of you half as well as I should like; and I like less than half of you half as well as you deserve."