The primary purpose of the player limit is to attempt to ensure that every player on the roster is making an absolute commitment to attend the event. As the player limit increases I feel like it encourages team leaders to assemble teams with the mentality that they will just see who shows up on game day and create their team out of these players. An increasing player limit also removes the sense of responsibility that individual players feel to attend the event, if players assume that there will be someone else to take their spot if they don't show up then they will be less likely to show up.
In general I like the idea that teams are being created with the best players that each team leader has available to them, with every player having a specific purpose, and the team having a grand vision of how they intend to win. Just like an mtg tournament where decks are constructed with overarching goals that complement a certain playstyle. I do think that allowing some degree of variance within teams is good, but if teams are being changed too much from game to game I think it will sort of dilute the experience.
From a spectator/community standpoint having teams remain relatively consistent throughout the event adds character and makes teams and players more recognizable. For the Twink Cup to succeed on a larger scale it's important that certain players or teams become iconic and beloved to people who are experiencing the community for the first time.