Apparently, 90% of teams that don't win their division lose in the first two rounds.
It's about 95% of the 3/4 seeds losing in the first round, and then the division runner-ups lose pretty close to 85% of the time in the second round.
Upon checking the UIL brackets, the last non-division winner state champion I can find is Rockdale in 2017. Also, Yoakum made the state finals as a 3rd place team last year.
It happens, but it's about one or two teams a year that advance "deep."