Carry-on, in itself, is the ability to conduct yourself like a regular human being. That means you can talk in the hallways (p-ways), you can walk down the sides of the p-way if you like, walk on sidewalks to and from class without "bussing up" aka marching in small formations.
Straight up carry-on would include wardroom carry-on, however, if it's just wardroom carry-on, that would mean that the 4/c would be able to look around in the wardroom, look at their food, talk at the table, and the works, however, the 1/c and 2/c would still make sure they're respectful, especially to upper class. Getting carry-on doesn't mean people will regard you as a 3/c, no, you will still need to be corrected now and then.
The following may be dated a little, but it used to be, if you heard 4/c were going to get carry-on, then 3/c would get civies, and the 2/c would get car privledges (without parking, of course), and the 1/c would get "O-Libo" aka Officer liberty, which I can say is much more liberal than the liberty you will have as an officer.
Of course, that being said, as a 3/c, I DIDN'T get civies when the 4/c got carry-on, and I didn't get car privledges as a 2/c...
so, in the end, sometimes its just a bunch of rumors...however after 100% of the 4/c pass their boards, it may be considered that they "earned" carry-on. In general it can't be taken away, however, when the rumors start, some classmates may act up and postpone any progress to "carry-on". Also, if you are that last 4/c to pass your boards, you will feel the pressure, not to mention, if you don't pass it, after a few tries you may earn a suitability for service mast. I saw many-a-4/c cry because of the pressure.
I didn't pass the first board I took, missed by one question, and did fine on my second. A big part of it is the pressure the 4/c feel, once you get over that, you know the information, you've been learning it all year.
