PhD Students research/annual assessment
I don't think your two questions can be answered in a very general way, different universities obviously practice this differently. What I can say is that I don't think these self-assessments have much of an impact on the graduation timeline, more that they're used to identify any problems as early as possible (when they can be more easily fixed).  

I'll instead comment on this almost-question:


  What I found interesting is that sometimes the assigned faculty meet the student before submitting the self evaluation form where he/she often tells the student to change some of the self evaluation responses.


There's at least two categories of things where this makes sense:

1) PhD students (especially at around half to two-thirds in) will be overly-critical of their own performance. It's very easy to look at others and think they're doing much better than you are. Without being sexist, in my experience women in particular give themselves extremely harsh (informal) self-assesments even when they are very talented. In this case staff would correct this overly self-negative outlook.

2) These assesments are not the proper avenue for everything. In particular, at my university it is particularly stressed in the guidelines for filling out the assesment that this is not the correct avenue to initially notify the university if you're having trouble/disagreements with your supervisor. There's probably more examples of this.