I may be mistaken, but I believe the tiebreaker is strength of schedule. The team with the easiest SOS wins the tiebreaker (with the logic being they played the easiest schedule of the teams that are tied, and they still finished with a bad record).
Yeah losing to KC would help our stock, but do we really want the #1 pick? I mean what exactly would we get out of that? There's no clear cut #1 this year.