As someone who came out of real-life Go schools, I can share some of my old experience of “rank segregation”. My school divides kids of kyu rank into 5 classes - 甲, 乙, 丙, 丁, 初級 - about translated into A, B, C, D, and beginner’s groups. 甲(1~3k), 乙(4k~6k), 丙(7k~9k), 丁(10k~15k), 初級(15k and below). And there is also a special group 幼幼班, literally is a daycare class, where preschoolers can join and as their daycare (no kidding).
Although the kyu rank is just a reference since the strength is assigned and evaluated by the teachers (but advance to 甲 乙 丙 above 10k normally required students to participate in some local tournaments). And the teacher’s strength, normally amateur dan, definitely varied between different schools. I got sent to 丁 class (10k~15k), and skip the 初級 beginner’s (due to I was already taught by my uncle), but I can still say, lots of the students are just there for the lunch, not to learn Go. And students amount the same class (about 20 to 30 students in a class) would quickly identify and know amount ourselves who are top of the class and favored by the teacher, and those lagged behind. We would have in-class practices and competitions, but it’s normally the teacher assigning the pairing by our strength. And I am ashamed to admit that I was one of the “bullies” amounts my classmates in those kyu classes.
As to the daycare class, they are sort of a mix of language learning and basic Go learning class. They are the loudest, and us unfortunate older kids have to share time-slot with them can hear them laughing and screaming across the hallways. I think they only play on the 13x13 board when I watched their practice competitions, and only a few of them were able to finish a game.
As to 初級 beginner’s class, their difference is huge (and there are separate adult beginner’s class and kids’ beginner’s class), and there was always some age pressure for those who couldn’t advance to the 丁 class, since their age is usually about the same (6~8 years old), if someone stayed for too long, they would be embarrassed to come back next year. Teachers would sometimes “promote” them up just to keep their pride, and those are usually the ones lagging behind. But if someone is the teacher’s pet and keeps participate in local tournaments, they would advance pretty quickly through the classes (especially those who won the prizes can skip classes).
Overall, the kyu class students usually have pretty large skill differences amount them even if they are in the same class. The age and competition pressure to advance only stopped when kids go over to the dan classes (our school divided them into lower dan 1~2, middle dan 3~4, and high dan, 5 above), where there would be huge age differences (some are already teenagers, some are just kids), but the skill level would generally be pretty close.