YA/ Children’s Fantasy book - only part I remember I’d that one of the characters make some big realization about himself (maybe his fighting or magic style) during a big competition and that makes him lose.

[Sarah]

I know that his mentors or friends really wanted him to make this realization, but they wanted him to change his fighting style after the big completion (single match, tournament?) not during it. Then, when he lost, they were both sad and happy. I don’t think this guy was the main character.

[Kris]

Sarah, around what year did you read this book?

Is the big competition in a Harry Potter type school or fantasy world?

[Florence]

One of the scythe series by neal shustermann? There’s a plot point like that.

[Sarah]

I’m pretty sure it was in a fantasy world of some kind. I think several of the characters (including the main character and the side character in the tournament mentioned above) were on a journey of some kind, but at this point of the story they’d split up for some reason.

[Ayesha]

don't have enough details to say this confidently but it does sound vaguely like one of Eragon / Eldest / Brisingr / Inheritance (the Inheritance Cycle by Christopher Pasolini)