It depends on the circumstances. First of all, if you suck too much, it might not be fun for yourself even under the best of circumstances. Secondly, yeah, if it's just for fun and especially if you're not the only who "sucks", it can be fine and as you say "liberating" and everybody's still having a good time. (Also, at least personally it feels easier to just relax and accept that you somewhat suck at that sport and still have some fun anyway if you're with a group of people you already know, which of course doesn't really work if you're going to a sports meetup to meet new people in the first place…)

However if you're the only one who comparatively really sucks and maybe on top everybody else is treating things a little more competitively, it possibly starts feeling a little bit too much like gym classes at school, where you always got selected as one of the last ones into a team because everybody knew you weren't really the sporty type and consequently wouldn't really improve any team's chances of winning…