Bigger odds means bigger profit. Also, anything could happen in a match 'coz first of all, they won't be in the tournament if they don't have the capability to win. Underdogs as we all know will still have the chance to come up with a win, it just so happened that betting on the underdog will put your money at a bigger risk, but as I've said with bigger rewards by chance.
Gambling on losing teams is a legitimate strategy, but more than betting on losing teams I think it is evaluating the risk/reward scenario with a specific bet. Sure, there might be a team that is likely to win, but maybe it pays a penny to the dollar. Basically, winning that bet doesn’t make a difference. I get more entertainment out of betting longshots and making sure the reward is worth the risk.
If the popular team or fighter become an underdog, I think it's good to bet them because usually they have a good chance to pull an upset. But for a mediocre team or fighter, I don't think it's wise to bet them because they mostly lose, only few times they win.
I never want to bet on a huge underdog, it's just like a lottery where the chance to win is near to zero.
There are times underdogs are just being underestimated by the majority which creates huge odds on their end. No one is certain of the outcome which is why we call it gambling. As long as you are aware of the tendencies then you're good to go. A gambler in the first place is not required to go all in for a single bet especially in favor of the underdog, so just practice managing the risk if you are really willing to bet on the 'losing' team or player.