It can be either.
By pre-screening applicants, a college “protects” it professional school placement percentages by only allowing the very strongest candidates to apply. (Like those whom the committee feels have a better than 80% chance for an admission. ) This means that some good, but not outstanding applicants will get denied committee letters. These applicants might be perfectly viable applicants who could get an acceptance if they have a strong “why medicine” narrative and apply strategically. But they will never get the chance.
However, if an applicant does qualify for a committee letter then the committee usually tries to present that student’s achievements in the most favorable context possible.
Without the prescreening step, anyone who wants to apply to medical school can, but they’re on their own to make sure that the LORs they obtain fit the requirements of every individual med school they apply to.
(NOTE: individual medical schools have different requirements for the number and types of LORs they require. However, all med schools will accept a committee letter in lieu of specific individual letters even if the committee letter doesn’t not include a specific type of letter they would otherwise require.)