“But what would a person who completely didn't care about such affiliations do? Pretty much the same thing.”

I disagree. This is a case of different populations having different utility formulas for the same item. Those who enjoy being affiliated with high status institutions are receiving utility other populations do not.

I think that people often pre-screen their selection options removing those options they think are overpriced aka do not fit their utility formula. They filter out signals belonging to other populations who use a different utility function.

An item may have many utility functions. Populations who’s utility formulas match the market price see correct signals. Populations who’s formulas do not match see the item as either a deal or rip-off. I imagine that populations that view the item as a deal must be small. Those that see the item as a rip-off probably purchase alternatives based off of signaling data they feel is valid.

In some cases the utility function map to the same value but in others they do not.