Pass/Fail grading in the first semester has been the practice at MIT for a 50+ years

It is actually not an awful practice. Many students who go from being the top of their class to the middle of the pack have a hard time with it.

There are other highly selective schools such as CalTech which have the same practice

Link: https://registrar.mit.edu/classes-grades-evaluations/grades/grading-policies/first-year-grading