This used to happen frequently when my daughter was on a level 5 at smaller competitions. Is it fair to NOT give them the award because other programs don't send their teams to compete? Do you want the smaller venues/comps to quit trying to bring in the higher level teams because getting the award is automatic? We traveled over 9 hours to 1 competition to find out that our level 5s competed against no one. Do you know what our kids did? They made it a "mini competition" to see who could win best of level. Youth won! They were more excited that 1) they competed the first tic tocs ever for a Youth team and nailed 4/6 with the other 2 bobbling on day 1, 2) outscored Junior 5 overall (gym bragging rights), and 3) ended up with the level 5 grand champs (mainly because #1 occurred both days and sent the crowd into a tizzy).
So yes, if there is only one team, they should get 1st. They work hard for it. Why would you even consider denying them that?