They use waitlists to fill spots when students don’t accept admission. It keeps classes robust and vibrant. Most schools rank students on the waitlist based on what they need (boys/diversity/athletes/musicians).
Our DD came off the waitlist at two schools including her top choice 2 years ago. We were told there would be a chance, so we turned down her second choice school. It was nerve-racking to say the least, but her time at school was even better than we imagined.
From what I can gather, schools base waitlist on which students are best for the school. I’m sure which could give more back to the school is also a strong consideration – being a part of the drama team, sports team and parents giving back $$.