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The new Scottish Cup format (as of this season) has been implemented in this game.
The participants are all correct for the first season (Kelty Hearts are in the Scottish Cup in FM08 when they were not admitted to participate in real life) but for future seasons, some coding has to be done.
Basically the non-league participants should be the same every season, apart from the 4 junior teams who have to qualify. Apart from Girvan, a junior team, should be in the Cup every season being full SFA members.
For the rest of the Junior teams, they should be split into North, East and West, one club from each to be in the Scottish Cup every season, plus one other who could be from any of the regions. This would presumably be based on club reputation.
Other than that, some East and South of Scotland league clubs participate in the Cup when they do not do so in real life, which is why teams should be coded to participate each season.