I strongly agree with the sentiments above and don't see a tournament with multiple teams from the same nation as particularly constructive.
The key issue is that the tournament ceases to be a test of which nation is able to produce the single best team in Warband and becomes more like a standard tournament with elements of neo-fascist nationalism introduced in order to divide the community further. Considering the political landscape of Europe at the moment has already shifted in a such a direction with detrimental effect, this is not a dimension that needs to be introduced to an already toxic and divided community.
Secondly, there is the clear bias in favour of nations with a more active Warband scene with any nations cup, which diminishes the possibility of 'the underdogs' seizing the day and producing an exciting or at all unpredictable outcome. This kind of oppression of minorities is made systemic by the introduction of multiple teams from the same nation and demolishes the equity, diversity and inclusivity of a standard nations cup.
Finally, this new system also exacerbates internal divisions within nations as to what constitutes 'a nation'. The question of a Welsh team competing independently has already been raised, which is relatively uncontroversial as there is little tension within the UK community over Welsh independence. However, for other EU nations, there has been more recent conflict as to whether certain regions ought to be autonomous or not and whether they are in fact a constituent part of a said nation. The option for multiple teams allows for further division within each country's Warband scene which is totally unnecessary.
As a whole, therefore, this new format promotes nationalist sentiments within the community, suppresses already marginalised minorities within the community and creates further division within those already vulnerable nations. As a result, it should not under any circumstance be adopted and, if any nations cup is to be held (which I would question in itself), it should be held on the same terms as previous tournaments.