I do teach kids with anxiety. I have been giving specific advice to a kid with anxiety over the last week. He will still do the exam, but not in the hall.
”Even regular testing in a normal classroom would be better than a long exam in a huge hall.”
lots of kids are happy in the hall, but kids who can’t cope don’t have to sit exams in the hall. Regular testing just means more exams.
Getting graded for behaviour, class involvement, homework is in my mind a really bad way of deciding who is good at maths. It is just a subjective teacher’s opinion and makes it inherently unfair and open to abuse. This kind of stuff was why teacher assessed grades during COVID were such a failure. It ended up increasing the gap between poor kids and rich kids. Exams are a great leveller because they are objective.
As for Germany, I couldn’t find an article that agreed with you that they assess maths for university entrance by things like behaviour. But if you have the article, I will read it.
Universities and employers are interested in things like dedication and consistency to some extent and those things they can assess in personal statements, teacher recommendations, interviews etc. But they also interested in how much maths you can do and that is why they care about maths exam results.