^^^ The question is whether the Hong Kong team represents the nation of Hong Kong? I am sure that the Nepal team does represent their country. Next time, if I organize a group of Indians and Pakistanis, and label them as Brazil or Argentina, do you think that the people of the Latin Americans countries will support that team? 99% of the population of Hong Kong is comprised of ethnic Han Chinese. How can a team that doesn't have a single Han Chinese be termed as "Hong Kong national team"? I don't think that anyone in Hong Kong is even aware that a team labelled as HK is playing in the Asia Cup.
Well again, they hold Hong Kong citizenship. I would assume their loyalty will now be with Hong Kong and that's where they would be living. So yeah they do represent their country. Doesn't matter what their origin is. The reason there aren't any local players is that most people there aren't interested in cricket.
Also yes if those people have immigrated to Brazil and Argentina, have their citizenship and live there. I wouldn't have a problem with that even it is full team and is selected on merit. That is their country now. Actually I would give you a real life example and have a question for you as well.
The 2018 world cup winning team France team had like 2-4 native players. Everybody else was an immigrant or kids of immigrants from different countries. Do you think it wasn't a good representation of the country?