I think the concept of an in-season, single-elimination tournament is great.
With regard to how the current NBA cup is structured, I think there's a lot to be desired.
I think it would prefer it if, for example, some early part of the regular schedule were used to determine a field of 16 teams. Then, those 16 teams would all go to some region* for a single-elimination tournament. There would be no more than one or two days off between games.
*I realize that 16 teams in the same city would probably create too many logistical problems. But, e.g., you could have all of these teams in the tri-state area playing at a small handful of different gyms, you could have all of them in Southern California, etc. Any acceptable region could enter into a rotation for the NBA Cup.