Define $P$ the chance a player will win the tournament when he gets a new opportunity to, playing against last game's victor. Now what can happen?
- If he loses, two games in a row are won by the same player, and the tournament is over , ie. $P_{L}=0$
- If he wins twice, he wins the tournament: $P_{WW} = \frac1{2}\frac1{2} = \frac1{4}$
- If he wins first, and loses his next game, he will have to hope for a new opportunity, ie. that the player he lost to will not win the next game. The chances that this happens are $P_{WLX} = \frac1{2}\frac1{2}\frac1{2} = \frac1{8}$. In this case he will get an other opportunity to win twice in a row.
$P$ thus becomes $\frac1{4} + \frac1{4}\frac1{8} + \frac1{4}\frac1{8}^2 + \ldots = \sum_{n=0}^{\infty} \frac1{4}\left(\frac1{8}\right)^n = \sum_{n=0}^{\infty} \frac1{4}\frac1{1-\frac1{8}} = \frac{2}{7}$ where the sum is that of a geometric serie. Since player C's first game is already against another game's victor, $P$ is also the chance player C will win the tournament. For player A and B, both equally likely, what remains is $\frac{1 - P}{2} = \frac{5}{14}$.
To doublecheck this result, one can check the chance for player A (or B) to win directly. This is the chance to win the first to games in row $\left(\frac1{4}\right)$ + the chance to win first, then lose, and then get another shot at winning $\left(\frac1{8}P\right)$ + the chance to lose first and get another opportunity to win $\left(\frac1{4}P\right)$, or in total $\frac1{4} + \frac{3}{8}P = \frac1{4} + \frac{3}{8}\frac{2}{7} = \frac{5}{14}$, as predicted.
NOTE
The above derivation is done for the interpretation that a player has to win two times in a row. To win just 2 times overall, one can point out that player C's only hope is to win his first two games outright; winning only the first game will result in a game between A and B where both players have already one win (which you can check by drawing the probability tree). In this case, the chance for player C is $\frac1{2}\frac1{2}=\frac1{4}$, where A and B both share the remainder, ie. $\frac{3}{8}$.
That the chances are not equal was already pointed out, using the simple argument that in the second game (player C's first), there will be a player with already one win while C has none.