I agree that it was a bad loss, but if you look at it now, it is a 1 point loss on a last second play to a top 25 team ( AP 22 and Coaches 25). I think that is the perspective the committee must be taking. The view is Michigan is literally 10 seconds or so of regulation time from being undefeated.
I don't think Michigan gets in though because I think Wisconsin or Penn State will jump them. I will say though, a 4 team playoff of Bama, tOSU, Clemson, and Michigan is a Monetary/Ratings dream scenario for the NCAA. If it lands on that 4, that probably plays a role, especially since they are a defendable number 4 with 2 losses based on quality wins and quality losses. I still don't see this playing out that way though.
The results really have positioned the B1G really well to get two teams in though. Would you ever have imagined a scenario before today where the B1G would get two teams into the CFP and neither was the B1G champion? I wouldn't have. I also think it still doesn't happen, but I guess it is more real than I would have ever said it could be.