Your line of thinking is correct.
By the prevailing logic, if there are one, two, or three entries, the winner has still not cracked the "top 30%". Out of three entries, the winner is only in the top 33.3%, not the top 30.
The way I see, and the way the serves MY purpose, is to define it by ranges.
Thus with five entries the winner is in the top 20% and second place is in the 21% to 40% range, which falls within the top 30%.
With four entries the winner would be in the top 25% and second place would be 26% through 50% so second place would still qualify.
This contest will take five days of my time, and more for those who live more than a day's drive from the venue. With that much invested the prospective contestants need some direct communication with management.