Plus in times of war you might be prepared to overlook some things. Such as a rather less than stellar Academy record.
Calling it less than stellar is like saying The Beatles were sort of popular.
It's not like he had a beer in his room or put eyeblack on a pair of officers binoculars. He was participating in a highly dangerous maneuver that had been banned because the last time it was tried all the cadets were killed. While practicing it, surprise, a cadet was killed. He then participates in a cover that makes the one that died look like it was his own incompetence, basically lies to his superiors and only when Picard figures it out and says you tell the truth or I will does he fess up.
I don't know how Starfleet academy works but in real life all four would be tossed immediately and possibly brought up for a court marshal for negligent homicide.
I know what I'm talking about too. I had a good friend who was finishing up his 3rd year at the AF academy. Great student stellar record. Smuggled his girlfriend into his room and got caught....boom gone. Two others who knew but didn't report it.....gone.
Last I heard he was an assistant manager at Target.