Would the problem with that side effect lay on the shoulders of the person making the assumption that it's not possible for there to be multiple candidates of roughly equal merit (at which point a quota would then be applied) ?
Seems like it comes more from people making that assumption than the quota system itself, assuming that everyone's held to the same standard of competence (which I would imagine is the case for FAANG companies).
I would describe it as more of a chilling effect on voting "not inclined" or raising concerns on performance.
In my experience,
1) being not inclined on such a hire leads to more scrutiny
2) managing performance is prone to more scrutiny
So: while the standard is expected, it's enforced to a lesser degree in practice. Which means a few bad apples abusing this unfortunately make everyone else (in the group who meet/beat the standard) look bad.
If someone does not say something because of fear of how they will be perceived I’m not sure the policy is the root cause ... and if a whole group of people behave that way (as I would assume often more than one person would have the same reservation) then that points to other issues.
And if a company’s culture uses affirmative action or quotas to hire people who they should not have, then that’s just racism of a different kind, and, I’d argue, not necessarily unique to or always caused by the policy.
Consider a system for selecting for characteristic X from a population. This system considers traits A, B, and C, which each have some (positive, negative, or 0) correlation to X in the global population.
With a perfect selection process, there should be 0 correlation between any of the traits and the desired property. If trait A was positivly correlated with X within your population, then you could improve the selection process by favoring trait A more. Simmilarly, if there were a negative correlation, you could improve your selection by disfavoring A more. This is completly independent from the correlation that exists in the global population.
There is no evidence that suggests that the diversity policies pursued by FAANG companies is being pursued because they found that within their population white and asian employees were less competent.
Seems like it comes more from people making that assumption than the quota system itself, assuming that everyone's held to the same standard of competence (which I would imagine is the case for FAANG companies).