I could see it as the following:
- 32 battles show up on the screen, each with 2 fighters. Each fighter has 1 stock.
-When you are defeated, you drop back to a spectator mode
- When you are victorious, you either move to a new battle, with a fighter their waiting; or, the fighter comes to you.
Alternatively:
- 32 battles show up on the screen, each with 2 fighters. Each fighter has 3 stock.
-When you are defeated, you move to another battle
- When you are victorious, you have them come to you
- When you run out of stock, you become a spectator.
It's similar to how Tetris 99 does it, where you are assigned a single "opponent" out of the 99. When they drop out, you get a new one to take on.
