I do compete so I can at least tell you how things are at the games I've been in. A lot of the athletes wear Sport Kilts, or something similar because they are lightweight, easier to clean and cheaper so you don't have to worry as much about tearing them up. I wear SK's and love them for the games.
One of the rules is that you have to wear a kilt, so if someone just shows up and wants to play, we'll find a "kilt" somehow. It may just be some cloth we find, or whatever is available, but we'll get them into something that will qualify as a kilt.
I have seen quite a few homemade "kilts" being worn and some are better than others. Some, as you noticed are really nothing more than skirts but again, if it works for them and lets them have fun with us, we don't care.

On the other hand, I know guys that will only wear their handsewn wool kilt in their clan tartan to compete. I've even seen a guy throw while wearing his sporran and big belt.