Those fights end in either submission or decision, or with the other guy getting disqualified for too hard contact. If you were relying on knockouts and hard hits, you’d just get out of the D-class as fast as you could.
I looked it up and it looks like they changed that rule anyway, now it just takes the coach’s say-so to get out of the beginner class. It used to be for the first two or three fights a person fights.
Seems like a dumb rule. If the fighters aren’t ready to fight, then just don’t have them fight, don’t change the rules so that it’s a completely different sport.
I think the idea is to encourage technical fighting over brute force or some such, and to lower the threshold for trying out fighting. It also has the added benefit of weeding out the fighters that are freaked out by what is essentially glorified full range sparring.
It makes more sense to think of it as a final exam for your amateur license than actual fights.