Making random regular season games NBA Cup games is dumb and weird. I agree that they should just block out a period of time for it and get it all done.
My suggestion is to do it prior to the regular season starting as a "kickoff of the NBA". I think they could put each group in a hub city to play all group games (using potential expansion cities, like Seattle) and then to play the knockouts in Las Vegas. This way all the games are neutral site and it gives cities interested in expansion a chance to host NBA games and show their city off.