When you're interviewing candidates, you can never be sure. You're always playing the odds, and hiring a bad candidate can be very expensive.
I won't claim that a high GPA guarantees a good hire, it certainly does not. But it improves the odds.
If by FSAE you mean the Formula SAE racing competition, some engineers have excellent intuitive feelings about machines that is independent of academics. But other kinds of ME require the math to get the job done, and for those you need an ME that can do the math.