It isn’t an “idea,” it is a fact. I observed it in my son. Once he learned he had a 10 school limit, he became much more disciplined about the selection process. And I hear the same from other students. They don’t ‘waste’ applications unless they are certain it is a good fit for them.
And colleges know that kids from our HS don’t apply unless they are reasonably serious. If a college knows that the app to their school is no
Not that hard to understand, really. When a resource is in limited supply, it is more valued.