It's just for TV drama.
What happens if chuck's 3 LHW's eliminate Randys last LHW? Then they compete with each other.. but wouldn't it SUCK to be on the LHW team kicking ass and get traded to the team that's getting it's ass beat.
If you are on the 'winning team' you will be there till the end, if you are on teh 'losing team' you are getting weeded out early..
Ultimately it don't matter as it will come down to 1 on 1.. but the whole "teams" thing is for 2 reasons
1) promote bonding between fighters to help make things interesting.. if it were every man for himself it would change the training/living dynamic
2) sell Chuck vs Randy to folks not familiar with the UFC fighters.. this whole series is partially a vehicle to promote their April fight to a mainstream audience