OK.... Let's assume that there will never be any commercially viable Hyperloop system. In this case, then Elon Musk is gaining IP for an application that will never return any benefit. Hardly a smart move if that's what he is after.
Can the IP surrendered for participation potentially lead into other applications? Yea - this is most certainly a possibility ... but it is a rather high risk venture. The investment is not trivial ... and the odds of a return are simply incalculable.
Is it simply a public relations exercise? No doubt Musk is getting a lot of press out of this and he is not afraid to be in the limelight. The encouragement of throwing down a challenge to the engineering fraternity is a great way to get a lot of attention.
Is this an around-about recruitment process? See who presents the most interesting/innovative thinking and offer them a job? They may never work on Hyperloop again, but they could be just the sort of person Musk wants. This is not implausible.
The Hyperloop concept is not impossible - but, just like Solar Roadways, the real question is: "Is it worth it?". Unless something dramatic turns up, then the "Yes" answer is not within reach.
For the time being, I'm not unhappy for this to continue - as I am a big fan of brainstorming ... and this seems to be an interesting exercise at an international level. There may not be anything revolutionary developed, but this is the sort of environment where a crazy idea might just get enough traction to go somewhere.
The big winners in this are the people working on the entries. There is nothing more educational than to stretch your knowledge in the development of an idea - especially one that isn't in any text book. Real world implementations are far more engaging than theoretical studies or simple, structured examples.
When I first started programming, I developed a simple challenge when learning a new language: Plot a sine wave. For the text based languages at the time, this was not a two-line exercise. I had to find out more than what any course material had set out to achieve what I wanted to achieve. I never needed to plot anything like that in my real programming - but it did get me more familiar with how the language worked.
I see the Hyperloop challenge as engaging the same sort of effort. Those involved will certainly be far better engineers because of it ...