I don't generally get why tests are designed to rush a student. Is speed a proxy for understanding?

Well, to some extent, yes. Of course the literal number of works you can write per minute is not, but:

- someone with a good understanding will often come to a concise, clear answer while someone struggling will produce a convoluted paragraph.

- the way to get to the result will vary depending on your understanding (e.g., are you blindly applying some method or understanding what's going on). For instance, "hey, this is a vector field, I don't need to evaluate this complex integral, I just need to compute the difference between the start and endpoint of the curve!". Both answers will be correct, but one denotes a much better actual understanding (and will take way less time).

I meant to say they usually aren’t a rush for non-ace students, just a full hour. You have to work diligently, though. Competitive tests excepted, obviously.

Speed is part of fluency. Fluency and understanding feel related