I don't think Paul will change. You could see from the beginning that Gary was just a little obnoxious, and that's pretty easy to change after a while. Paul, however, is in my mind, actually cruel. He releases his Pokemon as little as a minute after he's captured them, he makes his Pokemon cry, he doesn't care if his Pokemon are tired. In Paul's mind, he's the king and all his Pokemon are slaves. And that's something that's harder to change than a little obnoxious personality.
Then I would imagine that you're mistaken.
Think of it like a fictional martial art. Let's imagine that you're the Grand Master of Pseudofoo. There are hordes of students that you could train. Would you train students that are weak, or students that are focused and strong? Paul doesn't want to waste time building up the basics. Why waste time training Starly to learn Aerial Ace when you can catch one that already has it mastered? Why work to build up a Stantler when it only has Tackle to use?
The thing Paul wants most is to be strong, and in his mind, he can only do that by taking Pokemon that are naturally powerful and honing their skills. And no, he doesn't make his Pokemon cry. He made Chimchar cry. There's a difference, as Chimchar clearly didn't have the mental aptitude to meet Paul's standards. The power is there, Paul knows this, but it isn't worth the time to dig through all the trash to get to the gem. To expand on the metaphor, Chimchar was a diamond in the rough. Paul didn't want to go through the effort of cutting it. Ash, on the other hand, wants to make use of jewelry with the diamond as it is.
Honestly, I don't understand why people make such a big deal out of Paul releasing weak Pokemon. Would it not be better to release something you won't use back to its life, its friends and family, rather than just stuff it in a box or farm where it would have to start all over again, perhaps even be lonely?
EDIT: As to speculation, I predict Paul's reaction, should he lose to Ash would be as such; he will stick his hands into his pockets, turn, and walk away. Perhaps say something along the lines of "Well, that's that, then." In fact, I would offer that Ash would be far more instigating in his victory than Paul would be in defeat.
EDIT2:
I think you're forgetting that Paul singled out chimchar from the start, being the harshest towards him in order to get Chimchr to renact the blaze he saw Chimchar do the first time they met.
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I'd probably be pretty traumatised and cry if the person in my life I cared for the most neglected me, had no care for my safety and well being, never praised me, tormented me pretty much constantly and eventually abandoned me with no regret whatsoever.
I would put that on you/Chimchar, then, for having flawed expectations of the arrangement. Paul never pretended to care or love; on numerous occasions, he's stating that doing so would result in Pokemon that are spoiled. Torterra, Electabuzz, Magmortar, Honchkrow and Ursaring seem to be getting along just fine with Paul's training methods. Weavile... easily the weak link.