It's permitted, yes!
The team of coauthors who write the winning submission will get the prize, and can share it as the members see fit. A good default might be to just split the prize evenly, and if you're collaborating on something that might win a prize that you think should be distributed differently, I'd recommend that you agree on this in advance.
(No need to apologize. I don't think we discussed co-authorship anywhere in the post. I'm now thinking we should consider adding it to the Q&A section, so thank you for bringing it up!)
Is co-authorship permitted? Apologies if I missed this in the post!