Loads of schools do this, or a variation of it. Not just selective though they are the worst offenders.
DS knows of kids who were not invited to stay on at St Olives and other local grammars because their GCSES grades were below par ie they didn't get mostly A/A*s. It's also common to ditch those who don't do well enough at end of y12. Or get them not to sit Y12 exams and repeat the year (I know a few who have done this).
Even in DS non selective school, he wasn't allowed to continue a subject in y13 because he got a D at end of y12. Even though he'd been been predicted B/C, narrowly missed a C, etc. He ended up only doing 2 A2s which I am still annoyed at the school about, but for them of course it reduced the chance of students getting a D at A2.
I'm only surprised people are surprised that this goes on. It's a shame because when I did A levels in 1990, if students dropped out it was entirely their choice. Some did, some kept on even though they were never going to get top grades . In one of my subjects out of 5 of us the grades were A, A, B, E and U. The girl who got the U resat and I think got a D the next year. But at least those were all genuine results and didn't flatter to deceive.