I can’t speak directly about this scholarship, but I can tell you about my observations and experiences. My daughter is an out of state freshman at UNC. Her guidance counselor did not know if she would get in- out of state acceptance is very difficult.
She was #1 in a class of 400. All AP classes, all A+'s, all 5’s
Her test scores ( one attempt early junior year) were 34, 2250, subject tests 750+
Major major leadership roles in her school
Major leadership role in the community where she was in charge of a group that raised over $30,000
Outstanding letters of rec
Won an award covering 3 local counties - a student athlete award that is given to 10 students. She was the only student in our county to win one.
She did not get merit money and did not get into honors. I know another boy who recently graduated UNC from out of state. He was #3 in his HS class, received a 35 on his ACT, had all subject tests of 800, major leadership, and did not receive merit money or acceptance into honors. I know 2 students who received some type of full ride to UNC- one is in state and the other is out of state. The first one had his own company and made a tremendous amount of money that he donated, and the other wrote a math book that is being used in school districts throughout the country.
I think you should go for it, but you also have to be realistic. Gaining acceptance as an out of state student is hard enough. Getting merit is even harder and from what I can see, requires something very much " out of the box." Good luck to you!