Seems like a very verbose (and less easy to read) way of saying that you want the student to be able to choose which courses and associated grades appear on the transcript, somewhat analogous to “score choice” with SAT scores, or some types of occupational licensing tests where it only matters that you eventually passed, not how many times you tried and failed before.
Some questions that you may want to answer:
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If the student has earned a degree with a major, would you require that the student show courses with passing grades that fulfill the degree and major requirements? Obviously, this would not include failed courses, but some students may not want to show C or C- grades that may have been used to fulfill requirements.
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Some situations may require or prefer non-slow learning. A student with a history of needing to take courses multiple times before passing may be less desirable to employers or subsequent schools than a student with a history of passing each course the first time. Do you consider this not to be a valid concern?
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If a student’s transcript shows an apparently light course load some semesters (especially at a college where full time enrollment is the norm, i.e. not community colleges or local/region based commuter universities where part time enrollment is common), then would those looking at the transcript assume that there were failed or otherwise hidden courses those semesters? That could cause students who actually did enroll part time and did not fail any courses to struggle with the assumption that the “missing” courses were hidden failed courses.
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If course/grade choice on transcripts leads to more grade inflation in reported/exposed grades, then some situations could have greater compression at the top of the scale, resulting in selection being made more on the basis of other factors which may or may not be better correlates to the desired merit and achievement that is the (at least nominal) goal of the selection process. How would you address that?