Sometimes the board results will list the reason that an applicant has been DNR'd, such as OAR, clearance, etc. If a command is forwarding an application that doesn't have a qualifying OAR score that would seem to reflect poorly on them.
OAR isn't really an issue, that goes up and down as NRC needs to control the flow of candidates so the board doesn't really care about that.
In 99% of cases a DNR won't give a reason, the board is under no obligation to give one, many times it is a person who keeps applying with no chance of getting picked up due to lower GPA.
In those few cases that a person does get a reason one like you mentioned makes sense, that will affect them going for other IWC jobs as well, and maybe that DNR you mentioned was that cases, a security clearance issue that ended up being correctable.