Blizzard recently put out a developer blog which goes in-depth on how matchmaking works for Overwatch 2.
MMR
MMR is your internal matchmaking rating. MMR is a hidden numerical value which represents your skill, and decides who you are matched up against, not your skill tier division. Your MMR changes often, even if your skill does not. It will improve if you win matches against players of your current MMR level. All game modes use MMR, including Quick Play and Competitive.
