A team can participate by entering one and only one PG, SG or SF (I dont think a PG vs C really makes sense)and they have to have MVP potential or higher to join.
also those palayers could have huge difference, when this one on one contest isn't a second three point contest.
And why they should have a huge Potential? A star Player could be a MVP of a low league, and damn there are so much undeveloped MVP+ players who even work as fillers in those low level teams.
The tournament could be a basketball game against 2 players and it could still be the same as watching a games but with only 2 players and maybe just 3-5 minutes until the last player wins and how they play are still decided by how good their skills are.
It's just a little tourny for top players going against other top players in your division. It could be for getting some quick cash, maybe 3k-5k per win, and it can provide us managers how our top player do against other top players and see how good we really are. And I dont think it hurts anything in the game either.
no you won't get a image of how good your star players, because this one on one match will have a own match mechanic because it won't make a difference if you atrocious or legendary passing etc. Also the importance of IS and Rebounding should be lot higher then is normally is for your shooting guard etc. So it would be a totally different game, maybe funny but honestly i don't need it.