A different but related point about the relevance of grades. When we hire new faculty in my university department, we never look at undergrad GPA’s, and we hardly pay attention to graduate school grades. though we care about what courses the applicant has completed (as an indicator of skillset and potential future teaching and research).
Instead we’re mainly looking as the broad skill-set and “extracurricular” achievements. That means research, writing, publications by the grad students. Letters of recommendation matter a lot, but mainly it’s the research accomplishments (including doctoral dissertation research) and potential of the students that matters most. Teaching experience (as TA’s or faculty) and teaching evaluations by students also matter more than the applicant’s GPA.