I think it is damaging when hiring outcomes are skewed as well as it undermines the credibility of those who got hired under easier conditions fabricated by the company.
I too agree with the grandparent post that we should try to be scrubbing PII from applications as much as possible. I do code interviews at BIGCO and for some reason recruiting sends me the applicants resume which is totally irrelevant to the code interview and offers more opportunities for biases to slip in (i.e this person went to MIT vs this person went to no name community college).