It teaches resiliency, builds mental strength, and can develop strategies on how to work with people someone may not get along with.
Taking out extreme bullying or worse, we need to stop sheltering the younger generation else they’ll, on average, become less able to handle stressors later in life.
The key part of this equation, to my armchair thinking, is having parents who are active in teaching the child what strategies to employ in difficult situations, and teachers that mediate to ensure nothing gets out of hand.