I think it maybe based on the best 11 players in your team regardless of where they are in your 22 man line-up. Which would mean the cup format cannot be manipulated without selling all your players. I will try a few 3*90 in my starting XI next season to see if that makes any difference but I don't think it does because I saw some squads with 6*/7* players with a few 3*/4* players in the first XI with a few 5*/6* on the bench.
*Retired From Top Eleven*