Well, considering that the very meaning of handicapping a tournament is to level the playing field so that anyone can win, I dont really think that part is up for any interpretation. Giving an "advantage" to win the tournament to one player or another negates the purpose of handicapping the tournament in the first place.
Yeah, there are those people who run handicapped tournaments to favor certain players. Sometimes its a friend, sometimes its for other reasons. Usually though, any time that I have witnessed bullshit like this happen, the tournament usually dies a quick death as players find out about it and stop donating. You know, the regulars who come and play every week and spend money on food and drinks. The ones that if you offer a "handicapped tournament" to play in, expect a certain level of fairness and honesty about how the tourney is ran.