The "start denial" only clouds the topic. You formulate the problem in way that Player B knows Player A position (in theoretical aspect 2nd movers advantage). But I think it is more complicated than that. For the next part just forget the 1-territory presumption (not going to touch whether those games are inferior to two or three-territory games).
Rules of the game are defined by map and settings which form pay-offs (position, armies gained etc) that later in game determine the winner(s). Usually, as in real life, it comes down to either 1st or 2nd mover advantage. In warlight it is not defined and more of trade-off.
If map is unbalanced and territory values differ, then getting 1st pick may offer some benefits, but it comes with the cost of giving your location away to opponent. If map is balanced, and there are many equally valued territories, then 2nd mover has advantage at least in 1 territory-pick game. In multiple-pickable territories it comes down to who guesses most of opponent picks and in this case first move may be even irrelevant.
Now I would like propose what I have thought and discussed with some of players here. Kain has put together one interesting FFA template, which easily can be used in 1v1 as well. But the problem is system does not allow such settings - so it is more of a work-around. Discussion and reference here:
https://www.warlight.net/Forum/132509-bizzare-strategic-ffa-template-advanced-playersBut now coming to the initial problem. There is something inherently wrong with picking system. Why? Because you can only submit one strategy (one picking combination, although linearly infinite). But this is turn-based game and each pick should be a turn. This would allow player to use any picking strategy to respond each opponent move accordingly. This would eliminate disharmony in picking. It works best in no-fog settings. In fog settings it would still allow 2nd players advantage getting more information than 1st mover, but at least you can change your initial strategy if some of the territories were claimed before/ranked higher than you assigned them. I am not proposing to eliminate current system, but make it as a settings rule:
1) Sequential Picking
2) Order Picking
And now to answer shortly to the problem proposed in OP. It does not make game unfair, just gives you option - whether pick best territory 1st or pick later-last either to claim it or know if opponent picked it. But if both use same picking strategy, then sequential would solve inconsistency and need to pick too many back-ups. It is not unfair, if you are willing let go the most profitable pick, just to know your opponent location. But it is always a matter of settings we are speaking of.
Edited 2/20/2017 17:24:25