I can't see this being a good thing at all. It just wasn't something that was really done to my knowledge, I'm sure someone can tell me if there are historical examples of large scale mass mock combat, but calling up banners is a major thing.
Also, given the internal politics of a lot of realms, do we really think that if certain knights ended up on the field across from each other using fake weapons that either one would ever retreat before escalating it? It's hard enough to get people who's career's and advancements are not on the line to accept when they lost a wicker sword fight.
Imagine how this would go down "Ser, you unit would route." "The Hell it would!" "Clearly we would have broken you!" "Are you calling me a coward, you knave?" "I'm calling you a lack-witted fool who can't wield a real blade!" As no knight would risk revealing insufficient zeal for blood and war, the best outcome here is a grudge, more likely a fistfist, but a duel would both not be out of order and given that they are already in arm's length, not refusable.
I know at least one of my characters who in that scenario would only aim to kill people he didn't like.
