This seems terrible incentives. You are now in a purely adversarial relationship with your peers and hurting them helps you
Texan here. There’s still ways to get in if you don’t make the top X% of your class (the percentage is shrinking every year as the school climbs up the rankings and more people want to go… I think it’s near top-4% now? It used to be top 15% I recall), and many of those high achievers go onto other out of state schools, so it’s in the interest of UT system to offer automatic admission to the top achievers from across the state.
Just because the top X% is guaranteed admission, that does not mean all (or even most) of the school is from the top X%.
How much control can your classmates have over your own GPA? What percentage of 'control' over your GPA is up to you vs. your teachers, parents, classmates, and everyone else? I put those in order intentionally, as I think your classmates are below teachers and parents on the hierarchy.
This kind of competition happens in other areas of academic pursuits too. Is that strictly a bad thing?
The bad thing about UT's policy is that it encourages well-off students to move to a less-competitive school district (usually rural) in order to improve their chances.
It is hard to hurt someone when their score is a standardized test.
It's not unusual for families to change their school district so their kid can play for a better sports program and of course it's extremely common for families to want to live in the best district for education quality, but maybe some are now incentivized to move into a district with lesser competition for the top spots.
Not only that, but high performers are incentivised to move to worse schools.
It may actually improve mean outcomes, but harm societal outcomes, as the scientific impact of educated individuals may tend to be power law distributed (e.g. the most important breakthroughs come from a small sector of the population with wildly disproportionate impact)