@ucbalumnus Yes but I don’t think it’s a choice between ensuring the student is ready for the more advance courses OR setting enrollment limits. It’s usually a combination of the two
Using engineering as an example, the college of engineering(COE) may have minimum requirements (say C to B’s in core classes), that are in place to ensure the student is ready for upper level classes. However, having the student complete the core classes (Calculus, Chemistry, Physics, etc.), also acts to limit enrollment. Here the focus may be on setting the requirements high enough to ensure they can handle the more rigorous upper level classes, with the “limiting enrollment” factor being a (sometimes unwanted) side effect. A side effect that some schools try to limit with special programs to keep students in engineering.
To take this example further, each engineering major may have even more selective requirements, with these playing more of a roll in limiting enrollment. For example, Civil Engineering may only have the COE minimum requirements, but the much more popular Mechanical/Aerospace department may require all B’s in the core classes. Now the requirement is being used to manage enrollment.
In Harvard’s case, I really wouldn’t know. Like you pointed out earlier, getting B’s or better at Harvard is the norm, so I don’t know how many students are being rejected for earning C’s and ending up in a different, less rigorous major. However, I wouldn’t think it’s many.