I don't actually understand why body fat % is a big deal. We can all think of professional athletes that are probably 5-10 % body fat over the allowable limits in the Army that can run short distances, run long distances, carry weight, are agile, and any other physical requirement of an officer or soldier, and weight just isn't an issue. I don't know why but Charles Barkley, the basketball player, comes immediately to mind.
Since the Army requires combat readiness standards for endurance, quick burst, and the like, why would those objective standards of human performance (2 mile run, pushups, situps, etc.) trump an arbitrary figure like body fat %? If they want higher performance, then up the standards of performance. Why should the body fat % of a soldier or cadet who scores 90/90/90 in the objective test be told they aren't physically qualifying? It's not a body building contest, or a beauty contest.