If the "holistic admission" thing is being used to disqualify Asian candidates I would expect that two students with equal grades would be disadvantaged if they played piano rather than windsurfed.
From my anecdotal experience, I find this very plausible. (I'm a white guy who had extraordinarily poor grades in highschool yet was accepted to the school of my choice. My Asian peers almost universally far outclassed me in academic skill (proper student discipline in general); if you told me that I was accepted because I was on the swim team instead of another student with better grades who played the piano (both forms of self-improvement, not community service), I would not be surprised. Very disappointed, but not surprised.)
So do universities honestly think they have too many classical musicians, but not enough casual athletes? I don't think so. That seems incredibly implausible. I don't think they are thinking anything at all along the lines of "we better introduce some athletic viewpoints into our student body, lest all the musicians dominate discussion."
I think they are arbitrarily classifying hobbies as "well rounded" or "square" to allow themselves to shape their student body demographics to their liking.
EDIT: Agreed with jlgreco, added [] to what I said earlier.
If we are saying "Black student life is just playing basketball", then that is clearly an unfair stereotype. If however college admissions start disqualifying anyone who has ever played basketball, then I think it would be prudent to ask if perhaps the admissions people are attempting to disadvantage black applicants (particularly so if the "has played basketball" metric is accompanied by a series of other metrics that have a relationship to stereotypes).