That's not how the tournament works IIRC.
Basically, if one realm wants to merge with another, the competing realm needs to win ten straight victories, the tournament being held once a generation. The person who wins the last tournament becomes immortal and is the reigning champion. So in-universe, Outworld's attempt to merge with Earthrealm went as such:
-Tournament begins.
-Outworld wins 9 straight victories. On the tenth, Kung Lao (not the one in-game, an ancestor) wins, resetting the clock.
-Goro wins the next tournament, and wins tournaments 2-9. On the tenth (the one where MK1 takes place), Liu Kang wins. Only Shang Shung gets into shannanigans (steps in, but is also defeated), and Shao Khan, sick of losing his winning streak twice, gets into shannanigans as well (won't go into the details as they may vary between the original and rebooted timeline).
Basically, the tournaments went as normal most of the time, but then you don't have an interesting story. At most, you could do a prequel with the original Kung Lao, but that's about it IMO.
(I assume that if Earthrealm won ten straight victories, Outworld would forever lose any chance at claiming it - maybe Earthrealm would claim it?)