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You have the right to be negative and to criticize everyone (especially me). If it really is poor then I can hopefully fix it. However, for now I will simply to answer your two questions:

1. Promoting into opponent's pieces can sometimes be used to block opponent from moving into the position you promoted on. It can also be used to improve your score. (You can also cause yourself to run out of legal moves and result a stalemate before opponent can make enough moves to win; remaining as your own pawn may also help with this.)
2. You are (probably) correct, although rule 9 makes it to be not a draw. Also note that you can block your opponent's king from promoting too by moving Cthulhu back to your first rank; with enough pieces on the board they can try to prevent that however. However, it may still help to fix it a bit, perhaps allowing pieces to be regenerated somehow? I don't know for sure yet, but perhaps: Each time Cthulhu moves more than one move, opponent earns one regeneration point (you could start with -5 regen points perhaps?); you can spend any number of regeneration points on your turn in order to replace lost pieces on their starting positions if those spaces are vacant (this uses up a turn). Another idea can be that if the game actually does end in a checkmate, the final score is quadrupled for each king promotion (so if both kings promoted, the winner earns 16x normal points!!) There are also other ideas to resolve this issue.

If you're promoting in order to block your opponent from moving somewhere, why not promote into a piece of your own?

I still don't get it.  Promoting your own pawn to an enemy piece just because it could be captured if it was one of your own pieces doesn't alter the fact that you are giving your opponent free pieces.  Sure, if he has a rook on a8 and I move my pawn to h8, promoting it queen, I immediately lose the new queen on my next move.  I get that.  But that's still surely preferable to GIVING him a piece of his own on a platter.  I can't see any circumstances in which I'd do that, unless I was tired of the game and went on a suicide mission - in which case I'd just resign without all that rigmarole.