Having the ratings calculated using the initial ratings when the game started should be used. That way if someone with a 1600 rating challenges you, thats the rating they should use after you win or lose. This and a combination of rating floor should be used just like how its done for OTB chess.
Because seriously, when someone challeges you or you accept an open invite what do you look at ? Their rating!! and thats the rating you expect to earn points from if you win.