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This was back around 2020 when I was applying. I was in an information session lead by TMDSAS. I am just relaying what was told to me personally. It's not a story I heard from someone else.This seems to be some outdated information or hearsay- are you an applicant or a student?
If someone did drop a school before Match Day because they truly did not want to attend, it would be best to leave that school off if they needed to reapply.
But I realized I misread OP's post. Now, I have heard stories of people getting acceptances at a TMDSAS school but because they didn't like the school, they declined it and re-applied, but schools saw that they'd declined the acceptance so it affected them.
At the time, TMDSAS's reasoning was schools will see which schools you submit a primary to, but not secondaries. Since it's a flat fee, just apply to all and do secondaries for the ones you are interested in.
But I also add I don't know how TMDSAS had changed since I applied.