There were three Firsties in my squadron last year who left during their Firstie year to attend Phase 2 of STO/CRO. They were definitely three of the most physically fit people I know, and one of them got sent back because he passed out during one of the underwater exercises. They do not give second chances - if you fail to complete an exercise you can consider your STO/CRO career done for good. The other two passed Phase 2, but only one of them decided to continue to pursue the goal. We asked what advice he had to give for aspiring STO/CROs, and he said is to quite simply work out, every single day, including swimming skills. He said that since second semester of his 4 dig year he worked out every single day for at least an hour and half(even on weekends and during leave periods), focusing on exercises that are tested in Phase 2, such as swimming, pullups, running, and pushups. Even with that type of commitment Phase 2 was still an extremely challenging ordeal, and to simply keep up with the minimum physical requirements throughout the years academics will suffer and you can expect to do poorly on some classes, but it's about shifting priorities if you want to go the STO/CRO track.
The reason for having Phase 2 before graduation is that once you begin the actual STO/CRO training they have certain minimum physical and psychological requirements that they must be confident that you have met. They can't be worried about the little stuff like swimming ability and fear of heights when they actually need you learn the technical stuff. FutureAFA, at USAFA there are a lot of things that happen that are not the most convenient to cadets, and the early STO/CRO application process is one of them. During BCT, 4 dig year, and throughout your USAFA career you'll come to find that lots of unfair things happen here (and probably everywhere) but sometimes we gotta just play along.