I hadn't heard that before, but I like that way of thinking about it. It reminds me a bit of Goodhart's Law: "When a measure becomes a target, it ceases to be a good measure". Good grades might be a good measure of a student's performance, but when we focus on optimizing the grades themselves, they become less useful as a metric.

When I was in high school, there were some students who wouldn't take a class if it wasn't weighted, because it would bring down their overall GPA; even if it was an interest of theirs, they were worried that the effect on their class rank would hurt their college admissions chances.