If I understand things correctly, each student already has an “Academic Composite Score” (a score given by admissions predicting the success at the USAFA). Things that influence this score are items like ACT scores, GPA, class rank, class rigor, AP test scores, college classes, etc Then they verify the student matches their prediction after looking at the 1st semester grades. The students already know who has the scores to get in and admissions are in communication with those students.
The intent of the scholars program is to "groom" potentially high performing cadets to compete for graduate scholarships like the Rhodes, Marshall, or Truman. From talking to people in the program as a cadet, the secret of the program is that folks generally consider scholars classes to be easier than "normal" classes, which helps them keep high GPAs to compete for the scholarships.
It's definitely a good thing for those selected.
I was not in the program, but managed to swing a 1 year endowed grad school scholarship. My GPA was definitely one of the lowest for someone going straight to grad school.