It most certainly did not.
From the decision:
"despite the dissent’s assertion to the contrary, universities may not simply establish through application essays or other means the regime we hold unlawful today..."[W]hat cannot be done directly cannot be done indirectly. The Constitution deals with substance, not shadows," and the prohibition against racial discrimination is "levelled at the thing, not the name." ... A benefit to a student who overcame racial discrimination, for example, must be tied to that student’s courage and determination. Or a benefit to a student whose heritage or culture motivated him or her to assume a leadership role or attain a particular goal must be tied to that student’s unique ability to contribute to the university. In other words, the student must be treated based on his or her experiences as an individual - not on the basis of race".
-- https://www.supremecourt.gov/opinions/22pdf/20-1199_hgdj.pdf
The Supreme Court decision is not toothless because it explicitly disallows universities to create race proxies.
They simply have to smart about it. In addition to the explicit statement from Chief Justice John Roberts: "Nothing prohibits universities from considering an applicant’s discussion of how race affected the applicant’s life," there are simple ways to use factors others than merit. Some are listed here https://apnews.com/article/supreme-court-affirmative-action-...: preferences for lower-income students, accepting fewer early admission applications (which are more likely to come from white students), giving preference to first-generation college students, placing less value on test scores and more on high school class ranks, basing admissions on zip codes, and devaluing high school quality, etc. Many more strategies will surface if colleges go through discovery. In the name of surface-level diversity, all of them result in students who will perform worse in college than if admissions were based solely on merit.
How rude. It's also straight wrong. The merit of a student is in what they could do with education.