Rating Cap tournaments are systemically complete shitfests. I genuinely do not think a single rating cap tournament in FAF History has happened without some sort of controversy related to smurfs, alts, deranking, or dudes that "technically qualify but who are we kidding".
If people want to make tournaments that play better there are a few things that need to be done:
If you stick to rating caps, do not do it before signups. TrueSkill gives a team 400 points away from another team an approximate 5% win chance. If you want to make competitive tournaments, have people signup and close by Y date.
Once the date is closed a few things can happen. You can craft rating brackets from this pool of players using 500 rating range or so as a guideline for when games enter the realm of pointlessness. It serves absolutely nobody for the 2300 rated player to play the 1700. It is not interesting to watch. It is not interesting to play. It is a waste of time. Craft brackets. If the 2000+ bracket has 3 players, then make it a round robin. Better than putting them in with the 1500s.
Or if it's a team tournament you could either have had players sign up prior as a group and then determine rating brackets after the fact. This stops the tournament from becoming what literally all rating cap tournaments are: mainly beating the rule rather than beating the players. Sign up with a dude that is 1900 ladder and 1300 global. Sign up with the dude that is on a rating loss slump. Sign up with the dude that lost 200 rating but had the competence to hide it well enough you can't definitively prove it.
If you want to make it less restrictive, have people sign up and do a captain picking procedure. You can still try to make the tournament competitive at this front by making captains pick from a pool of players that are, well competitive. You can still use the 500 rating variance as a sort of benchmark here as it means some level of strategy beyond "give me your base" can be worked out between players.
If you go with captain picking, then give people Z amount of time to practice with their teammate if they have any interest.
But it's really exhausting to see teammate tournaments relegated to the tournament being won before it begins because the real game is beating the rules and not the opponents.
Uncapped tournaments are still fine obviously, this is about the attempts to create tournaments that are "fair" and yes I am aware this requires more TD work but I don't really care.