When I read the title, I assumed it worked like college early decision, where admission is binding. This is not the case, so this sounds like a great thing for YC to be doing
There's also restricted early action, which restricts what schools you can apply to along side the REA school, but is non-binding
Its not as though the college will sue you or anything like that for backing out of an early-decision agreement, but, the student will have a difficult time applying to other schools for the upcoming academic year.
(If the student isn't accepted into the early-decision school, the high school will supply transcripts to whatever other regular-decision institutions the student applied for... but the idea is that if a student wants to apply early-decision, they either attend the early-decision school for the upcoming year or none of its competitors. If you want to take multiple offers from multiple competing schools and compare them, you need to apply regular-decision or early-action)