My thought experiment for “how player friendly is a league’s salary structure?” is basically trying to imagine what would happen if owners were banned from violating otherwise applicable labor laws (an example of such a violation would be dictating to employees who they have to work for through a draft). So I’m not sure I’d agree that the distribution of league capital is really separable from overall compensation, but I’m also not sure if you’re really arguing it’s a separate issue or not.

It seems to me that, as you observe, some owners have a willingness to spend money to win games that goes past the cap. It also seems somewhat obvious to me that, in addition to proving the salary cap is porous, such free spending owners prove that there is large unmet demand from owners for “winning.” Surely if Joe Lacob is willing to pay salary plus luxury tax, he would be willing to pay the same total amount in pure salary. Therefore I assume that (at least current period) NBA comp would rise without a cap.

The long term problem is related to the one you highlight in that, under my thought experiment, the league probably becomes even more top heavy than it is already especially with respect to major metro areas. It also become vulnerable to boom/bust overspend cycles. This may be bad for the league overall long term and bad for future players.

I’m also not 100% sure whether the luxury tax gets spent on salaries or not by teams below the cap. Like it doesn’t seem like it does necessarily but I couldn’t figure it out googling while watching wildcard games. Cheers!