Seems like there should be no need to do “hard” gatekeeping (i.e. refusing recommendations and transcripts) when the counselor can just be honest about telling a student asking about an unrealistic reach school that s/he has no hope (and therefore should not waste time applying), and that the recommendation if s/he does apply will be an honest one* that will not be as good as those given for stronger students also applying to that school. Perhaps that may be sort of like @JHS 's story from #24, if indeed the student in that story was basically a no-hope applicant despite the presumed legacy preference.
*e.g. if the student is only “average” or “good”, that is what the recommendation will say, not “outstanding” or “one of the top few encountered in [the counselor’s] career”.