FWIW I've given a LOT of checkrides, a minority resulted in downgrades and even smaller minority resulted in Q-3s. I've also sat on selection boards (WIC, IP upgrade and such), where we reviewed FEFs as part of the selection process.
I always viewed checkrides as a necessary evil and approached them as a continuation of the learning process, you should always learn something because you are typically flying with a more seasoned aviator and not one of us is perfect. Yes the stated purpose is a periodic standards check to ensure compliance but it was also another opportunity to evaluate the instructors in a squadron and their training program...this is a team sport. At the end of every checkride I gave a final grade based on the following optic, do I feel comfortable sending this person into combat with my brothers and sisters in this community.
I never once gave a Q-3 to someone who made a technical mistake like being off airspeed or altitude for weapons employment or an instrument approach. On the rare occasion I did give a Q-3 is for something blatantly unsafe, usually related to attitude and most importantly...effort. Case in point I once gave a scheduled checkride to an attached guy who had a reputation as an ungood pilot. The day prior I sat down with and went over the profile I wanted to see and outlined the areas of general knowledge we were currently focused on. The next day he absolutely floundered in the briefing and general knowledge portion...basic blocking and tackling stuff...as if he didn't even try to study the night before. I could have ended it there and no-stepped but I wanted to give the benefit of the doubt and see where he was in the airplane, at that point I wrote down "downgrade for GK" in my notes. We took off and went to the range, he skipped two checklists and tried to arm the guns before we had cleared the range or completed our basic checklist set up. It was gross and pure safety of flight, I called knock it off and ended him right there. That was by far the exception...although I once Q3'd a dude walking down the hallway...not kidding...he was bragging about something he did that was so unsafe and outside the regs that I had no choice . I confronted him and he admitted it as did some others on his crew...absolutely GROSS. 18 years later I still can't believe they did it, story for another time perhaps.
AFSOC has a unique setup in that the GUNSHIP FTU was colocated with the ops squadrons (that is about to change unfortunately with a move to Kirtland), so newbies got to do training with mixed crews. The training sorties were tailored to their training but there was a lot of benefit to training with folks who were cycling in and out of combat all the time. I gave a lot of initial qual checks and most turned out fine but I always finished with the same statement. If I am here I can GUARANTEE you will get a no-notice within the next six months. Here was my rational...for a newly qualified person completing an MR check meant that for the first time since they were 5 years old they were not forced to study. I reasoned that they were forced to study through grade and high school, college, UPT and FTU...probably 20 years of continuous studying. They suddenly had time and disposable income...AND they were living in Destin Florida. There would be a huge temptation to exhale and get lazy. If they wanted to be safe and credible, now was not the time to back off. I honored that promise on every occasion (with a VERY large optic). Once or twice I had to take a recently MR dude or Dudette into a private room and give them the WTF are you thinking speech (had one dude who broke down in tears he was so disappointed in himself), I never Q-3'd anyone but I think it set a tone in the squadron.
On the subject of downgrades in particular, the FEF was used in discussion for things like WIC. Sitting on a selection board we never once excluded someone for a downgrade, sometimes it led to deeper discussion and the only time it became a deciding factor was if there was a pattern of downgrades which I only saw on one or two applicants that were being pushed to WIC for the wrong reasons (careerism).