It happened to me and Amherst in season 25 in Smith (D3). My opponent was Rutgers-Camden, and their coach djones107 had lost his team for a year, then got it back. So he had nine or ten of his own players, but a sim-generated crap schedule with a 300+ SOS.
I remember eagerly awaiting the matchups, since this would be the first time I was favored in a NT game. And then the 16 seed I was playing was more talented than my team! I still thought I would win, but wrong. He beat the 8 seed to make the sweet 16 before losing. Then he won the NT a few seasons later. These things made me feel a little better, but not much better.
This scenario could not be replicated in real life, but it seemed pretty reasonable to me in this sim (once I repaired the coffee-mug-shaped hole in my wall).