This is less specific to UVA and more philosophical (all med schools with tiered clinical grading have these issues), but basically I think that the nature of the preclinical curriculum is such that your grades are more likely to respond to hard work than are clinical grades. In clinical grading, most places try to convert an entirely subjective conglomerate of opinions of the student into some sort of continuous variable in the form of stratified grading. It almost always hurts introverts and minorities more than anyone else. I've seen some extremely impressive classmates get meh clinical grades. Sure, people argue it's best to be used to weed out sociopaths and total weirdos/jerks. But all you need is a narrative eval for that, not a tiered grade, and such a tiered system hurts normal people who just aren't as charismatic (but still compassionate healers) in addition to the weirdos and jerks.
Also very dependent on who you get as an evaluator e.g. some people only give mediocre grades across the board because they care more about getting the form done in 2 minutes than they do about giving an honest assessment etc. So if you get a few of those types while your classmate gets a bunch of generous graders then you look worse on paper than them. I've gotten evals from people who I worked with for maybe 30 minutes total so you're often getting hurried and incomplete pictures of who you are as a person on your evals.
At baseline, I don't love graded preclinical either. People who get into med school have proven they can get good grades in that structure. But with step 1 being p/f residencies are going to start using things like clinical grades more, and I think there's more inequity/injustice in the way clinical grading is done, so a graded preclinical seems like the lesser of two evils to me. I know that my best clinical learning was done on p/f rotations where I wasn't worried about the politics of the grading so it just seems like the p/f model is better suited for the clinical phase. Just my philosophy