That’s why I pointed to the top students at the state school, not the student body as a whole. Top performers in an Honors College at a state school have similar profiles to students at highly selective schools.
For those top performers, it may be more meaningful to earn a high GPA at a school where A grades are not given out as freely and there is less pressure toward grade inflation. Or, conversely, it may be less significant if that top performer happens to have a lower GPA than their Harvard counterpart. And that probably is not acknowledged by recruiters or grad schools.