I have veyr mixed feelings about children sitting on a tabel all of one ability. But the one thing it does do is show the kids what those of the same ability are up to.
So, children all doing creative writting. Little Sue really struggles and writes half a page, that is huge for her, teacher really pleased, well done Sue. katy sitting next to her thinks half a page is great, so does half-one page and feels pleased with herself.
But if Katy was sitting next to Jane, jane usually writes 3-4 pages, and katy might have picked up her game and aimed for 3-4 pages too.
Quiet well behaved children can often end up doing the work in front of them, and handing it in. The fact that they coudl do much mcuh harder work is not discovered, because they are not stretched, and do not misbehave when bored.
One slight red flag for me is that the teacher should have seen her results from last year, where she came into class exceeding expectation, and should have been challenging her appropriately. She doesn't seem to be considering where they were recorded as being at the end of last year.
Also, in a good class, the children will have the next step in front of them, so, when you can do this, then you can try that. Which gives them something to aim for.