No, there is no direct penalty for using prompts. Also, remember that red flags are for inappropriate/rude (e.g. racist or sexist) behavior, not low quality answers. Red flags are also all reviewed by a committee (of reasonable people!) and one can still be accepted into the program after being flagged, if the committee decides the flag is too harsh.
I don't think you could have found a more offensive way to word this.
My thoughts on this are probably going to repeat some of the sentiments above.
First, let's be clear - as mentioned by others, the "social accountability" is the key factor here. It is NOT about taking a seat away from someone who "deserves it more". It's about acknowledging the fact that different groups have faced enormous amounts of oppression and systemic barriers that have subsequently left them unjustly disadvantaged or marginalized when applying to medical school when compared with the typical population of medical school applicants. Jean Anyon's work on the hidden curriculum is a good place to start if you are curious what kind of disadvantages I'm talking about.
So instead of being upset that the admissions committee can make the decision to admit what is, frankly, an INCREDIBLY small number of people based on alternative qualifications or exceptional factors (and please note the fact that alternative measures were used do not mean that these applicants are less deserving or undeserving of their spaces - I imagine you have to be pretty dang exceptional to even be considered for this admission route), perhaps those of us who don't qualify for this type of admission should be thankful for the fact that we grew up in a system that afforded us the amount of privilege inherent in meeting the general admissions criteria. Would it be nice if everyone could be fairly assessed based on the same criteria? Yes, it would. But that is not the reality of the world and, frankly, I find it incredibly promising that the U of C medical school admissions team is acknowledging that and trying to take steps to address it.
Will I qualify for this alternative admissions program? I highly doubt it and I would never ask to be considered for it because I recognize that the system already favours applicants like me. Ultimately, at the end of the day, if I meet the academic criteria and get edged out by someone with alternative criteria that the admissions committee honestly believe will make a better doctor when all is said and done? Well, that sucks for me... but not for the field of medicine. Will I be sad? Of course I will be disappointed and crushed that I didn't get in, but you will never hear me argue that I 'deserved' it more than the person who was chosen. That's not my judgement to make. Frankly, I would argue that if you manage to be so exceptional that you are considered for alternative admission that you very well could be the more qualified applicant and bring an incredibly important amount of experience and perspective to the profession.
TL;DR: Alternative admissions criteria do not unfairly advantage unqualified applicants. They merely attempt to even the playing field for those who have been marginalized by systemic injustice but who have gone on to accomplish incredible things despite the oppression they have faced. So instead of being upset that these applicants are being assessed on their unique merits, perhaps you should be thankful that you have had a life privileged enough not to need this program.
GPA: 3.86 MCAT: 33 ECs: a few long term very involved positions, three years of undergraduate research, part time jobs.. Interview: great for 6/8. The other 2 were kind of awkward, came off pretty strong.
Was on wait list last year and didn't get in. GL to everyone still on and don't give up!