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Alcaraz will face Green Group runner-up Novak Djokovic in a mouth-watering semifinal.
Home favourite Sinner also clinched top spot in the group with a 3-0 record.
The earlier Green Group clash was a non-event as Stefanos Tsitsipas retired injured against Holger Rune.
Jannik Sinner made a dream start in front of his home crowd with a 6-4, 6-4 defeat of Stefanos Tsitsipas in their opening Green Group clash.
Tournament director Tiley also said Australian Nick Kyrgios could return at the Melbourne Park Grand Slam after he underwent knee surgery in January and suffered wrist and foot issues in an injury-plagued 2023.
'Djokovic is also more successful because he has had a level of fitness/physique that has allowed him to play more than me,' added Nadal.
The 31-year-old former Wimbledon and French Open champion had been provisionally suspended since October 2022 after testing positive for banned blood-booster roxadustat at the US Open last year
Djokovic said he received advice on his own career from Bryant, who died in 2020 in a helicopter crash that also killed his daughter, Gianna, and seven others.
The Serbian is the first man to win three Grand Slam events in the same season four times.
A final involving former US Open champions Medvedev and three-time winner Novak Djokovic on Sunday is one of obvious high quality but not the next chapter in tennis's hottest rivalry of Djokovic and Alcaraz that has had the sport buzzing.