Taken exactly as you staged it: it's no problem at all. If you're SUPPOSED to lose, then you could hope to play your game and at least show you've got some stuff. I think it would be much worse for the "stone-cold champion" who, on a fluke, might get whipped by a nobody.
One of my favorite examples of "center stage tournament psychology" is
Earl in '83, beating Mizerak. (start watching around 3:35). I don't think there's another pool video showing that depth of "joyous basking," and the extent of it is a good measure of the misery Earl can show when things are turned around.
To do your best you simply have to be able to work your way through the psychological pitfalls of those situations.