As I said the participation trophy and the winner's trophy are distinct aesthetically and children are also aware of the difference between the two.
The participation trophy builds a sense of belonging and inclusion, helping kids feel valued even if they didn't win the game and the distinction between the two trophies helps children learn that society rewards elite outcomes, but it also highly values commitment, showing up, and working together as a team.
All of this suggests that a participation trophy neither brings the value of the winner's trophy down nor it harms the youth sports.