Purchase Agreement with Deposit pre-LOI stage?

I recently had an interesting experience on a brokered deal and wanted to get the community’s perspective. I submitted an LOI that matched the CIM asking price. The structure was straightforward, with a small 10% seller note and no funding concerns. I also have very relevant industry experience, so I felt it was a strong offer. However, I was told that I lost out because other buyers had brokers representing them and submitted a Purchase Agreement with a security deposit. When I pressed further, I learned that the Purchase Agreement (with the deposit in escrow) was still contingent on due diligence, which, to me, sounds very similar to an LOI. The seller ultimately chose that path. This struck me as unusual. Has anyone else encountered this dynamic, where a buyer submits a Purchase Agreement + deposit even though the process was supposed to be LOI-driven? Or does this sound like something odd is going on? There were a few other quirks about the deal that I can’t share for confidentiality reasons, but I’d love to hear if others have run into this. For context, this deal was in Florida.