There is a caveat that this article doesn't consider.

In India, if you are studying for elite colleges, in this case the IIT's, you write the entrance exam designed specifcally for that, which is IIT-JEE.

Most people go for separate training camps to study for JEE. The 12th grade exams are a cakewalk compared to these exams, and the stuff you study for the JEE is sometimes super advanced, like calculus in super advanced levels.

Most kids studying for JEE ( I was one of them), don't optimize for 12th grade exams because the JEE exam rank is all that matters to get into these "prestigious" institutions.

So a bad 12th grade score is by design more than anything.

Though there is definitely a lot of signaling, the research has ignored a very important behaviour.