This is one country two system and HK players got the short end of the stick.
HK players must be unhappy.
But were they qualified to participate?
Of course, it goes without saying, HKSAR is qualified to play the China National Games - One country first, then two systems, that is, HKSAR is part of one country, China, just like any other cities, municipalities or provinces in Mainland China.
As to why you seemed to think HKSAR players got the short end of the stick because of the 21-day quarantine, it has to do with HK having its own CDC with its Covid-19 prevention and control policies, safety measures, the rate of vaccination and the types of vaccines used, which differs from the Chinese CDC.
The 21-day quarantine requirement also applies to any Mainland Chinese returning from overseas, such as all the Olympians returning home from the Tokyo Olympics. Remember, I posted about Chen Yufei's weibo (microblog) where she talked about how she passed the 21-day quarantine period c/w photos in the Chinese Badminton thread relating to the China National Games. Only Mainlanders who have not been overseas and traveling within China from city to city or province to province are subject to shorter quarantine (I can't remember 7 or 14 days).
In short, there's no discrimination against the HKSAR players, only different CDC Covid-19 policies and measures in place for travelers, local and foreign, into Mainland China.