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Different schools do it differently. Some are strict (or "true") pass/fail - ie no ranking, passing is passing is passing. Some are sort of pass/fail, and report quartiles ("pass is pass, except here's the 25% that passed with the highest scores, and here's the 25% that passed with the lowest scores). The person you were responding to was making it clear that WMed is one such school, a "sort of" pass/fail. Some report a rank ("This person passed and was ranked [3rd / 3rd from last] in their class"), and we don't do that.
Many (most?) current students had the impression that the school was true pass/fail, but it was recently made clear that we are ranked into quartiles which are reported as part of the "Dean's Letter" sent to residency programs to which students apply.
The pros are that the top 25% of the class gets a potential feather in their cap. The cons are that the bottom 25% (and one could argue the bottom 75%) get a negative by virtue of having it made explicit that they are not in that top 25%.
The counter argument is that Step1 scores should make your academic achievement clear, regardless of your quartile.
The counter-counter argument is that if that's the case, why report quartiles anyway?
It's not a simple issue, and it has not exactly gone over well among many current students. In all likelihood it will not make or break anyone's application to residency. At the same time, my sense of the prevailing sentiment is "why the hell would we include something that could still potentially hurt our classmates?"
