Participation trophies are not the problem. They still compete since the winner get the best trophy. But teaching that "winning" is not everything is also healthy. After all, what is worth more, a friend or a trophy? Well, the friend is the one who would help you when you are down and in a situation where you aren't a "winner". What is worth more? The friend or the trophy that would end in some closet when you grow up?

And then, in real life you have the opportunity to cooperate to achieve things that you won't be able to achieve on your own.

Teaching about consequences is not about competing. You can win all trophies and yet not learn about consequences. The rapist Bryce Turner proves that. He was a champion, and a rapist. Because he never had to face consequences for his actions. They coddle him because he was a good swimmer.

So yes to teach consequences, no to "win at all cost".