Firstly, it’s off putting especially for children. Go to school all day getting graded on everything they do, then come to a lesson for more grading and learning? I think they have enough on their plate as it is. I want this to be FUN. Same for adults really, its extra work, stress and pressure on top of your daily life.
I myself was not graded and still became a full-time professional musician. Did Jimi Hendrix get graded? Nope, that’s good enough for me. I don’t even agree with music critics! Its an ART, not a competition, music is whatever you want it to be! Its a way to express yourself not what a curriculum demands. The curriculum ends up learning everyone the same thing with old songs that you or your child won’t even know!
Unless you want to be a classical musician then its a complete waste of time and the likelihood is you or your child will pack it all in after wasting a load of money. There’s plenty of teachers for this sort of thing, I want you to become your own style of guitar player, playing what you want to play and ENJOY yourself.