Making it graded tends to F it up bigtime. You waste soooo much time doing overkill process for the sake of proving that you can to get the grade. CAD models will be made. Simulations will be run. Powerpoints will be made to convey the results. When in reality all you needed was one dude to spend two hours prototyping both so that they could be evaluated and the more viable path of development chosen.
Heh, grades served as a good barometer for me to know how much effort I needed to put into the boring classes to pass them. My transcript is a nightmare, high 50s and low 60s in the "easy classes", high 90s in the hard/interesting classes. And then a bunch of really fun/challenging extracurricular stuff that used to get a line or two on my resume when I was a fresh grad.
Thank goodness that the only employer to have ever cared was one where many of my extracurricular friends already worked and vouched for me. The only other time my transcript has actually mattered was when I went back to grad school; my overall average was about 2% too low for the good funding and I had to spend a semester working a lot of hours at the undergrad homework help desk until my first semester MSc. grades came in and qualified me for a significantly better stipend with less hours spent on other people's homework.