What happens if my guild is the only guild in its tier?

A brawl will only happen for a given tier if at least two guilds have selected that tier.

If your guild is the only guild in its tier, then your tier will automatically be downgraded one level and you will participate in a brawl at that lower tier. So if only one guild is in Tier 3, that guild will instead be playing in a Tier 2 brawl.