bro could get 1st and the game would put him in 7th

This bothered me too. Xbox One controllers only work on the window that is in focus. Because player 6 used an Xbox One controller, I had to keep their window in focus. The Windows scheduler provides a slightly higher priority to the active window, so it suffered from less slowdown than any of the other instances. Thus, the game and the timer both ran faster for them than any of the others, so they were actually moving faster than everyone else while simultaneously getting a worse time and worse items. To remedy this, I have since upgraded my CPU, and in my testing the desync is often not more than a few frames per race now. I have also significantly improved the input system so that everyone uses GameCube controllers, so I don’t have to worry about any more Xbox One controller idiosyncrasies.

This is a custom server, but recent builds of Dolphin should support the LAN mod as well: wiki.tockdom.com/wiki/LAN_Multiplayer

actually, no. this was an online match, meaning anybody can be any character. this means characters can overlap. if you've seen online gameplay, or just people talking about online, you'd notice the infamy of there being 12 player races consisting only of funky kong. now, you may ask, why? why have more than one person play as a single character? let me explain. this is done for a number of reasons. first, you aren't loaded into a match when you pick a character, and if you were, it would break the game. second, making this change would cause many people frustration, as this would mean you'd have to take out an available slot to choose a character. for example, if someone has already picked funky kong, it would take out the funky kong slot, and nobody else could use him. again, this could frustrate people and might have led to people targeting others who "stole their character." here's the thing. even if this were normal multiplayer, and not an online match, you could still do this easily. with one remote, pick bowser, then un-pick and move to a different character. do not click the character you moved the remote to. then, do the same exact process with the different remote. press back to go to the last menu in the main menu, the vs race or battle race menu. press a again, and both players will hover over the same character. press a on both of them, and you can play as one character as both racers. so no, this isn't actually impossible, though it is kind of strange. hope that all made sense.

This was accomplished using 12 instances of Dolphin connected for multiplayer using an open-source online server replacement, all running on a single PC.

Yes. This was all done using Dolphin.