I was initially thinking they were being too coddling, but you're right, my first semester grades weren't all that good either. I was working hard, but it takes a lot to adapt to the much higher expectations of a decent uni.

They aren't a meaningful signal for how capable a person is by the end of the program. But maybe the fix would be to not count them towards the GPA/permanent transcript, while still providing the achieved grade to the students so they have a measure of how they did.