As someone with difficulties early on in life and thus showing behavioral issues (what you describe as bullies and underachievers), I went through a system like this and I despised it. N=1 but segregating children at early age based on the behavior they're showing, i.e. the difficulties they're having, felt kinda cruel. It worked academically I guess, I ended up ok, but for many it just meant they just simmered in an environment of mediocrity and rarely made it out.

I get it especially with younger ages, but on the other hand if the student is persistently disruptive they should be removed for the sake of the other students. It's also unfair that 1 student hinders the education of 20+ others.