What is better or fairer for tournament?

Breaking Ties If players have identical win-loss records, the tie is broken based on the difficulty of their competition. If the tied players have played against each other, the player that won that match wins the tie. If they have not, “tie-breaker points” are awarded by calculating the strength of each player’s schedule by combining total match points of all their opponents. The player with the most tie-breaker points wins the tie and advances. This way, the person who played the most “difficult” games wins the tie. This procedure is also called the “strength of schedule

Or calculating points for and points against in other words total point's for ships destroyed and ships lost.

The first method. And I believe that's what the tourney rules say to do anyways. I use the order of NFL tie breaker rules (but cut a few out due to not being applicable): Win-Loss Record, Head to Head, Strength of Victory, Strength of Schedule, Net Points.

After that, I don't know what I would do... NFL goes to net TD, but going to net ships destroyed doesn't make sense in this game since a TIE swarm will always have a negative net, and a dual YT should always have a positive. At that point, if there was still a tie, I'd probably investigate who had initiative in what games and if someone had it more than the other, that person would win the tie (based on the elimination rules for games that end in draws). If that was a tie, I suppose I would go and have the two of them "determine initiative" between themselves. This way, if someone had 99 points, he would win the tie breaker over the person that had 100 points... and if not, it comes down to a coin toss anyways (which is the last step in the NFL procedure).

The second appears to favor the player who had weaker opponents.