The other way around is much worse. The slower students get frustrated as they fall further and further behind until they feel it's impossible to catch up and give up.
Unfortunately most teachers teach at the level of the more advanced students, not at the level of the slower students. I don't know if they mean to do this, it might be unconscious, but they definitely do it.
This is almost universally false. They target the least advanced students and let them more advanced students fend for themselves. In the US it's even more pronounced because of teacher evaluation by test scores, etc. Teachers are incentivized to ignore the smarter kids because their test scores are high already, and they get more bang for their buck by raising the scores of the kids at the bottom of the range.
I’m talking about e.g. 5–8 year-old students, listening to books that even the best prepared in the class would struggle to read on their own, but even the least prepared have little trouble listening to someone else read.
I feel like we must be talking about different activities here. Children are very engaged listening to a good reader reading a good story. Listening to stories does not cause any substantial proportion of them to “fall further behind” or to “give up”.
> Unfortunately most teachers teach at the level of the more advanced students
This was almost never my own experience as a student in ~17 years of formal education. YMMV.