The posibility to set a defender on a midfielder position in case of emergy.

I had 3 banned players and could not select a defender to place in midfield. Neither could i set a striker. 

Is normal that you can do that, hapoens in real life fotball also.

you can use players outside their position, they just play worse.

You can^t. When you select midfielders foer wxample, it only shows midfielders from team, you cannot select defenders or strikers.

When you select a player for the change above the list you have 2 options, in your case it is "midfielder" and on the side, "all players", you select "all players" and your entire team will appear in the list.