Why do W (i.e., Withdrawn) grades exist?
Like most administrative things which don't seem to make sense, it boils down to accounting and financial aid. Students can take federal financial aid and withdraw from individual classes provided they maintain at least half time status. There are a bunch of caveats &amp; rules and making sure everyone's complying and not accidentally (or intentionally) embezzling requires record keeping.
https://studentaid.unc.edu/special-circumstances/withdrawing-dropping-classes-and-underloads/

Dropping a course after University census date will generally result in receiving a withdrawal indicator of “W” on your transcript.  If you had already received your financial aid for the term, this generally will not result in a change to your financial aid, so long as you do not withdraw from all classes.

https://sfa.osu.edu/contact-us/consumer-disclosure/drop-and-withdrawal

Most financial aid will not be adjusted for hour drops after the Student Financial Aid census date. All hours for which you are enrolled as of the fourth Saturday of the term or which you schedule thereafter, will be counted as “hours attempted” for determination of whether you are making Satisfactory Academic Progress for financial aid.

There's no other long term way to prove that the initial financial aid disbursement was correct than a transcript imo and any alternative will just be more complicated and probably screw people years down the line.