The unfairness is pretty obvious, if you don't see it I don't know what to tell you.
> That doesn't mean they're a worse person / student > How you interpret that later on is a different question
This is pointless semantics - we all know exactly how it will be interpreted and what it will mean for Y's prospects to have the worse grades.
> Trying to change the scale leads to the measurement being meaningless
This is literally the exact point I preemptively addressed at the end of my reply.
Your analogy with athletes is nonsensical. We're not talking about comparing the best of the best who are consensually opting into competing against each other. We're talking about disadvantaged people who are subjected to (whether they want to be in it or not) an unjust "grading" system that only highlights and perpetuates their "underperformance"... But sure, we can use your analogy:
Take the top 10 100m dash competitors,
put some of them in all inclusive athletic villages with access to world class facilities, coaches, nutrition etc and let them focus all their time and energy on training
put others in a low income country shantytown with no access to any facilities, coaches, with poor nutrition and no time or energy to train because they have to engage in subsistence agriculture to just survive
then, let them race! It's fair because tHe tiMeKeEpiNg is oBjEcTiVe