The only reason to consider dividing by players on top of damage is to try and counter the individual luck bonus. but in practice, it only gives more bonus to heavy hitters with high luck, and penalizes low hitters with low luck, making the system extremely prone to causing players to rage on each other.
The damage is already being divided, so killing something faster means nothing, after killing two things, each player should get the same points as killing ONE thing. However, the current system is written for heavy hitters with high luck, which has been pointed out countless times. If you have a good suit, you get more of a good suit, if you're rich, you get richer, it literally makes the gauntlet a paradise for the wealthy, and a hell hole for the casual player.
That's the issue, the main issue with the system. It also shouldn't even consider the amount of players, or how much damage players do, it should give a flat amount of points after getting a kill, and luck added onto it. that's a balanced system that makes sense and benefits the server. more luck usually means hitting less, it slows the kill rate, so players have to balance their luck with damage, and if they get rich and have a heavy hitting luck suit, they benefit everyone else too, ontop of themselves.