It absolutely could result in points being deducted.
The character review board happens BEFORE your record is reviewed by the Admissions board. If there is something in your record the raises question, it will be reviewed and a recommendation will be made by the Character board. After that, the Admissions board will review the full record and will determine 'qualified' or 'not qualified'. It's not a final check before a decision is made.
The admissions board, in addition to determining qualified/not qualified, can also adjust the WPM. They can add or subtract points for subjective things that the quantitative measurements don't capture. Those are called RABs (recommendation of the board). It could be plus or minus, and could be enough to put someone at the top of the slate, or move them to the bottom, but usually isn't a major change. The admissions board does not make a decision about who does and does not receive an offer. The board only determines 'qualified' and defines the final WPM value. The offer decision happens later during the slate review, or when choosing the final spots from the national list of fully qualified candidates. That is why a candidate could be found 'fully qualified' in October, but not have a decision until April.
After all the slate winners are determined, there are still a few hundred spots that are offered at the end of the cycle. By law, the first 150 go to the ones at the top of the list, ranked by WPM. After that, USNA picks and chooses who it wants to fill out the class based on whatever factors they want.
btw - USNA uses a WPM (whole person multiple), not WCS, just a different term for basically the same thing