This is tough because it creates a strong incentive for them to make bad long-term decisions. Think of it from the perspective of a student: you're taking 6 other courses, all of them very demanding with graded assignments, except for this one class where the assignments are not graded. You have a limited budget of time over the week, and time is getting short. Do you: a) work really hard on your ungraded assignment and turn in your best effort for no impact on your grade or b) tell yourself that you'll make up the work at a later point in time, and then focus on your other graded assignments to make sure you optimize those grade. Then you will focus on the other course later on during spring break or something.
Sure everyone says they'll do a but really, this sets a lot of students up for a trap. They think they will have time to make all of this up later, but really what will happen is they will just fall behind in the class. The assignments from other courses keep piling up, so the free time never really materializes. In fact, the same scenario repeats: the student will forego a second assignment, having already done so once before. Then the deferred responsibilities pile up and you end up with a student who is failing your course (even though on paper the grade is undetermined (kind of like a wave function), in all actuality it's just waiting to collapse to a grade of F at test time.
Look at it this way: it's like a reinforcement learning problem. If your reward schedule is that you only give a reward to the agent when it achieves the end goal, sometimes training that agent takes a very long time; if the search space is too large, then the agent can go any which way and will take a long time to reach that goal. That's ungraded assignments.
Instead, if you give the agent little rewards along the way when it makes some significant progress, then the agent can converge to the goal state much faster, in a way that avoid a lot of unpleasantness for everyone. I don't like giving Fs, and they don't like receiving Fs. I feel like if I give an F that's really more on me than them. Part of my job is not just to put course content into student brains, but to also shape their ability to manage their time and juggle a variety of projects. It's the kind of thing I spend many semesters (4) instilling in my students and grades are one of the effective tools I use to do so.
You may say just do away with all grades and we can talk about that. There are different models we could use. But as long as others are using grades it's kind of a baked in assumption at this point. Very hard to change that kind of system.