The only benefit I can see is it allows you to start the season with a less Q squad so that your Cup gets easier, then spend them after that to have a little edge.
The only reason I couldn't win this Cup is because I was the only lvl 3 manager in the competition against mostly lvl 5's, and this even by starting the season with 4/5* players (no scout).

I find this selection system quite messed up to be honest...