I always thought that it was the first to queue for that role got in first and if withdrawn only to requeue then you'd be back at the end of the line. Is this assumption not correct?

either way if there should be a penalty then ALL should get it whether they're finishing something or not. Don't queue if you aren't serious enough to join if preoccupied, there are others waiting to get in as well and it's not fair to make them wait as well just because you want to finish a fate. That's where the problem stems from in the first place, people won't requeue when afk...