HOT TAKE: You want clinical grades if you're gunning for competitive specialties
There's been some talk about the merits of pass-fail clinical grades on reddit and nationally, and certainly there are considerations about equity, bias, etc. However, having gradations of clinical grades allow medical schools to highlight their very best clinical students.
I attend a school that went pass-fail during the pandemic from clinical grades. We recently saw institutional-specific data comparing our match rates with clinical grades and without. Going pass fail, our school's match rate at the most competitive institutions and in the most competitive specialties went down (especially in sub-group analyses for URM students). Our medical school is reverting back to clinical grading given the results of this analysis.
Clinical grades are important in highlighting the strongest students -- P/F helps hide the weakest students, but also doesn't like the best student shine. Being on the other side in a competitive specialty, having clinical grades allows us to differentiate exceptional students (especially those from non-T10 schools) from the rest.
Edit: I go to a T10 that is reverting back to clinical grades.