They should be getting praise and more mentoring, not sure why they'd worry about how the C's are being treated. It should also be clear to the C's that they are not making the cut and either they get better or they leave.

There's something that is very pernicious in the government in Brazil (where I'm from) where in a department there's one person that does all the work while everyone else sits around. You can't fire the non-performing ones or push them because there is a very strong worker protection system for them. Back in college it took me a full week to get my grade history because the person that did all the work was on vacation and nobody else bothered to learn how to pull it or cared if students couldn't get the report.

These are the C's, people that have to be forced to do the work, and that will eventually cause all the work to pile on everyone else. There's no fun in working in an environment like that and its a quick recipe for a burnout.

Indeed. And when the C is unmanaged, creating needless work for others (review code that doesn’t work, etc), making a negative contribution to forward progress, then the rest of the As and Bs are looking around wondering why this person is not fired.

Yes, but the takeaway is the opposite if what you're implying. Working with C's is draining for everyone and a drag on morale.