Being amazed at how that's allowed displays a naiveté only one could have if they've never been in the process. What you describe is exactly what being in academia is all about for the last couple generations. Being a grad student sounds prestigious to an outsider, but the system is literally built to exploit their labor.
So that if you ever step out of line with regards to what the government deems "worthy" behavior (whatever the hell that means at any given moment) you can be de-banked and effectively excluded from participating in society
How convenient that the government doesn't make the numbers public and then have to issue statements like this when journalists do some digging on the matter