Seems people are missing the point of this.

Cobra Kai was teaching a normalized war methodology. ( black hats )

MiyagiDo ( White hats ) played effectively and patiently and struck with honor when the time was right ( the competition )

In this part of the movie Daniel goes there to explore and thinks about joining - but he leaves once he sees there is no honor. And he begins ascending his payback and training as a result.

credit:anon on other platform