A CDR stated that the Navy has a temporary surplus of pilots, and that, once upon a time, the Navy cut pilots with scores below 90 to eliminate a surplus. His message was to give effort and score well in API.
That once upon a time was spring 2005... bad times for last part of YG04 SNAs going through API.
The slaughtering of those who didn't make the cut of the rolling NSS of 42.5 (by the end of things it equaled around 94% test average) did include Prior Es and YG03 SNAs who did the 1 year masters programs the Navy offered them out of college and had the unfortunate timing of going through API with the YG04 crew. Of those who didn't make the cut: some went SNFO, several re-designated outside of aviation (including at least one blue to green), a very lucky few got NSS waivers that allowed them to continue on to primary and many went back to being civilians.
To the OP (and their friend):
From what I remember, nearly everyone was offered an in house re-designation to SNFO. Most of the people who got sent home did so of their own choosing- some because they only wanted to be pilots and others because they had a chance to move forward with their lives after years sooner then expected and didn't have to pay the Navy back the money it paid for their education.
If a similar situation were to happen again, I think they would again attempt to get you a re-designations for those who don't make the cut.
Having experienced the YG04 RIF first hand, I would NOT try to change service selection to something else out of fear of getting cut in API. Go down and do your best there and things will work out one way or another...