The only cost of an incomplete is it doesn’t help towards a degree, but a degree is just a signaling mechanism. If you want to be able to use their degree to signal something to someone, you will have to jump through their hoops.
As AI eats up the need for half-assed "I googled a few things and wrote something up and then slacked off for five hours" white-collar-paperwork jobs, it's gonna be pretty hard for people not willing or able to demonstrate that they can do anything that couldn't just be fully done with an "agent" instead.
What is your expectation from such a class? What are you hoping to get out of it?
If you merely want a tutor that will help you out navigate a topic you are interested in, with no strings attached, then sure, yes. No need to take exams.
But if the goal is to get a formally recognized degree in some topic, then you will need to accept that there will be oversight over how you understand that topic. Because the institutions granting those degrees need to sign them off. And if they care about their reputation, they would be interested in signing off only on those students, who actually understand the topic.
So there will need to be exams. In the AI era, it is close to impossible to guarantee that a remote exam will accurately evaluate your understanding of a topic. So the exams would need to be carried out in person.
There is nothing children-specific in using such approach. It is merely one of the few still somewhat objective ways to actually test people's understanding of some topic.
If so, how would an adult be treated while still expecting them to demonstrate mastery?
If not, what do you think a reasonable expectation for an adult should be?