Sorry for the late reply.
Thing is, the entirety of your line of logic abides by the concept that August is capable of keeping the magics he copied in the past, something that is very unlikely to be as it causes several plot holes.
The problem with that logic though is that
all of the Spriggans have magic that causes plot holes when they're beaten. Bradman should never have lost due to the Sensory Curse, Jacob got interrupted by Happy + had a quirk that nerfed him when he could have theoretically just re-Stealth'd, Wahl got killed by something he was supposedly immune to, Irene could have just launched a roar at Erza before she destroyed Deus Sema, DiMaria only lost because she fooled around in Age Seal, etc. August not using the magic he had just falls in line with the standard S12 PIS/CIS.
Also keep in mind that we've only ever seen a bloodlusted August once, and that was when he almost one-shotted Natsu and co.
- The "meteor" he used doesn't appear to be heavenly body magic, as it does look relatively different to how Meteor works (we have Jellal's recent meteor for reference, August's lacks a lot of the visual details of meteor) and most importantly lies the fact that it's easily visible despite Natsu claiming that meteor is too quick to be percieved by normal human senses. Not even Acno was able to see Jellal, while Gildarts is able to see August before he hits the two of them. With that, it appears to just be a very quick charge attack
Really? They look really similar to me:
Both have the jagged outline around them, made out of light. Also, both Acno and Gildarts had the "!!" above them when faced with Meteor, so both of them were blitzed IMO. Not to mention the fact that Gildarts couldn't stop August from hitting him or Cana. That alone sets it as a blitz.
- Oh and one last thing, the "melt" attack was called a "heat" attack or even "blaze" attack in other translations. Not to mention, when August recalls when Gildarts is talking about copied magic, he shows us a panel of him using that heat spell, meaning that he copied it right there from Natsu
Yup, which means he also retained it.
AyeSo if we take in consideration the fact that there's rather weak proof towards August being able to keep the magic, with a lot of evidence against it, it means that against Natsu, he could only keep copying Natsu's magic or using one of his crappy knock-off spells, which might not be able to do much, as we saw with Gildarts. So unless he goes full Ars Magia, which is prohibited in this tournament, I don't see him beating the plot beast that is Natsu without being able to copy some proper magic from someone else, which is impossible given this tournament's rules. All magic he copies from Natsu is useless, so all he has going for him is some basic types of magic, which is why I'd have to give Natsu the victory
I'm not really seeing how the proof behind August retaining copied magic is weak, since we saw him use Meteor against Gildarts. And honestly, this doesn't even matter against Natsu, because (as you pointed out) he can just use Melt. We already saw what Melt did to Natsu previously, it actually damaged him despite the fact that he's massively heat resistant and tried to negate it. And even then, that was with Universe One saving him. While I'm not saying that August could one-shot via Melt, I could see it leaving Natsu weak enough to be taken down by another Melt or just CQC.
At the end of the day, even if we're saying August doesn't retain magic (which I think is wrong since he clearly used Meteor), Natsu can't hurt him with magic so he's going to have to rely on pure CQC. I just don't see him pulling that off considering August has enough skill in CQC to toss
Gildarts around and his magic is so powerful that his nuke surpasses Natsu's heat resistance.
