I think players from the same city should be separated; I wrote about "13 capital players" and "13 from the rest of the world." The difficulty is that there are unknown variables. When will Preds, Piterius, Medium arrive? That's why we can only be calm once we've seated the last pair.
The last thing I want in round 1 are pairs like AlexGreat - Stinger or Bayazet-Roland. For the players, organizers, and fans alike, it's better when the favorites in the championships start their clash later. If such a favorite is knocked out at the beginning by an unseeded player—so be it.
But if the favorites survive the first two rounds, then that battle will be... a ton of people will tune into the stream starting from round 3.
It's evident even from your list of seeded players—I dare assure you that, for example, Term would easily roll both Napalm and Vitalik in a match to 3 wins, partly because they have much less game practice under these specific rules—Napalm has been playing only on special occasions for over a year now, and Vitalik plays predominantly SoD.
Furthermore, I see nothing wrong with strong players starting to face each other in the first rounds; from a spectator's point of view, it's even a plus—there will be something to watch. And it won't distort the final result much; the probability of a top player making it into the prizes after a loss in round 1 remains quite good, simply because they will get weaker opponents in the next 2-3 rounds.