They're only cheating themselves in a world that increasingly cares about knowledge (market trend of seniors being preferable hires to fresh out of school juniors) and not the piece of paper that "proved" you had such knowledge.
I was never asked for my GPA when I first went into the industry. I never put it on my resume and it never even came up. After a decade or so of interviewing candidates, many of whom were recent graduates, I don’t recall any that put their GPA on their resume, and I obviously never cared about it either. Maybe the recruiters did, I dunno.
I’m a data point of one, and I could be wrong, but I don’t think it’s clear and obvious at all that GPA translates to job prospects. At least not in tech.