Oh, not another one of these.
'Can anyone explain'.
Yes, I can: it's not a great surprising mystery.
Oxford has one of the most-scrutinized and most time-consuming admissions processes in the country. I bet they make mistakes from time to time, but it's also quite possible to get excellent results and not be the sort of student they want.
To me, 7A* grades suggests an excellent student who will do extremely well in the US system, where you specialize later. It does not guarantee a student who is very deeply brilliant at their chosen subject, does it? Which is the requirement.
Latin and Greek are, no doubt, lovely A Levels to get (and mariscal, if he's at a State school doing that, it is likely a rather good one, and I bet you his Greek class is pretty small - not doing down his achievement, just it's relevant to you asking about State Schools). But they don't prove someone will be an excellent Chemist, and that's what Oxford was looking for.
Sorry to sound grouchy but I really hate these stories, they put people with perfectly decent grades off applying and suggest there's something shady going on, when there's never any evidence.