Earlier quoted context omitted.
I don't get why incentives mess test up? I would try harder on graded test, including preparation.
When a measure becomes a target, it ceases to be a good measure. The more you prepare specifically for a test, the harder it is to determine how much of your score is based on your general understanding of what is being tested, and how much is based on you exploiting the test.
If I wanted to know how well the average person on the street can clean a toilet and my test involved asking a bunch of people for a demonstration without pay nor feedback of any kind I don't suspect I would find a lot of clean toilets. I would instead have learned that people don't like cleaning toilets and gained no insight into their ability to do so.