Having said that, I could live with your proposal of an 8-team "Champions" bracket, where at least one of the G5 gets inclusion.
I've been thinking 8 teams all along, I think its the happy medium. Give each P5 champion an automatic bid, and then a bid to the highest rated G5 champion, and finally 2 at large bids. If there is no ranked G5 champion, give 3 at larges.
There was only one ranked G-5 team to start the season. The AP's perception creates the G-5 reality when it comes to the CFP. It's not only a slight against Houston, but an indictment of the P-5/G-5 system itself.
And how many ranked G5 teams will there be to finish the season? Probably 3.
First off, I fully believe an undefeated Memphis makes the playoff. They were sitting at 8-0 and ranked 13th. From that point of the season on, the top 12 in the CFP ranking lost a combined 17 times. Memphis had Navy, @Houston, @Temple, SMU, and then likely Temple again in the AAC championship game. If Memphis wins out, combined with how the other teams fared to end the season, Memphis is in the group of Oklahoma, Stanford, and Iowa at the very least.
As to Houston, I feel like they are kicking themselves for giving a home and home to Texas State. Most definitely kicking themselves over the UConn loss. If Houston goes undefeated, they almost certainly end the season in the top 10. The UConn loss wrecked their perception, as did weak finishes from Cincy and Memphis. But back to my point about Texas State, I feel that if that is a series vs any P5 team, even a school like Kansas, Houston breaks into the ranking quicker. Next year they start off with a neutral site game against Oklahoma, have Louisville at home, and the Texas State game is on the road. I think Houston is going to absolutely sprint through the AAC next season (look at their schedule) and Oklahoma/Louisville are very likely to be ranked when Houston plays them. If an undefeated Houston can't make the CFP next season, then I think it is fair to complain about the P5/G5 as it related to the playoff.