A student can get a B at one school and get an A with the same effort at another. A valedictorian at one school may only make the top 10 percent of students at another. Similarly, a student in the top 10 percent of a competitive school could be valedictorian at another. How does the college admissions process account for the discrepancies between the academic rigor of curriculums among high schools?
They know how competitive a high school is from the school profile report and the stat of the students. In addition, they have regional admission officers that are family with the high schools in their assigned area.
First, as already stated, they have admissions staff that are familiar with the individual high schools, second they have test scores as a fallback when they’re not sure (for instance a new school where they’ve never had an applicant before). SAT, ACT and other standardized tests are used not just to compare individual students, but can also be used to compare high schools (just as we can use the common data set as a starting point to get an idea of the quality of a college we’re less familiar with). Maybe the first student got a B, and was barely in the top 10% at a school where the average SAT score was 1300, while the Valedictorian with the 4.0 attended a school where the average SAT was 1150 or lower. When my oldest was applying to schools, she met students that fit both profiles.
This is why test scores are extremely important: validation.