Pretty darned mystified myself!
Maybe people are misreading requirements for "grade 4 or equivalent" for some kind of scholarship or a school with competitive entry of some kind where music will help them jump up the list and get a place. Schools are allowed to set certain criteria about what will make someone more likely to get a place, even public (state) schools, and one of the things they are allowed is to place an emphasis on music, sports, other specialist subjects, so that if a particular desirable school is a music specialism they reckon they are more likely to get in with a music exam. Usually, though, a statement from an adequately qualified teacher will be quite sufficient for those purposes, a pass is not generally an actual requirement you just write and say yes, little Jenny is of a grade 4 standard.
Grade 4 is the first one to be rated at a particular level according to the national qualifications framework, which is a system that tries to tally up different types of qualifications based on difficulty and the amount of work usually required to get them so they are comparable to each other. It's the way that someone can compare a music exam to a certificate in bricklaying to an apprenticeship in hair colouring to an officer of the day exam on a submarine, they are all so different how could you possibly compare them yourself, so they are given scores and are worth a certain number of points. Perhaps if people are short of points on their academic exams they could really need music exam points to bulk up the number, but this is usually far higher up the chain, more for college entry than for high school!
It's also possible some schools will not permit entry to a GCSE music course without a certain practical grade because teachers (usually mistakenly) believe that will help. Again, a statement should be more than adequate for that purpose, but then you may prefer that they somehow squeak a pass with AB because you wouldn't write such a statement for some!
I'd ask, though. You have to understand what is making these people tick and why they are in such a hurry to get grades, grades, grades and never mind if they don't learn anything along the way.