A salvage idea that failed –
Condorcet with
"candidate-equalities permitted in votes" still exhibits
"favorite betrayal" and hence presumably
leads to 2-party domination.

Here is an 11-voter 3-candidate election
example proving that Condorcet schemes with ranking-equalities allowed
suffer from favorite-betrayal, and that is true whether you use "winning-votes"
or "margins" – doesn't matter – same example kills both:

C wins

#voters

their vote

2

A>B>C

3

C>A>B

4

C=B>A

2

A>B>C

Defeats are A>B by 7:4, B>C by 4:3, and C>A by 7:4.
There is an A>B>C>A cycle in which B>C is the weakest defeat
(measured by either winning votes or by margins), so that C is elected.

Notice that the two A>B>C voters shown in blue on the bottom line
can turn the "lesser evil" B into the Condorcet Winner by "betraying" their
favorite
"third party" candidate A and
voting B>A>C or B>A=C or B>C>A.

However, changing their vote instead to
A=B>C or A>B=C or A=C>B or A>C>B or A>B>C or B=C>A or A=B=C
(or C>B>A or C>A>B or C>A=B)
does not suffice: then C still uniquely wins in all cases.
Hence favorite-betrayal of A was strategically necessary.

All this is true regardless of whether you use "margins" or "winning votes."
However I have cheated a bit by assuming the Condorcet method is such that it elects the candidate
with the weakest defeat in a 3-cycle.