People, reviewers not excluded, are influenced by perception. Elements of an application may be evaluated differently under such perception than if each element was scrutinized individually and absolutely. Reviewers will almost certainly be more/less forgiving of weak elements of an application given their overall perception of candidate quality. Happens all the time.
There are so many elements to the applications. You can write an awesome proposal but if they've already read your weak reference letter they may view it in a different light,...
As much as we can wish/hope the review process is robotic enough to be completely objective, the reviewers are human, and most likely tired overworked humans,…! Is this good or bad, not sure. Is it fair,...most of the time I suppose?! I don't think it means they give any less of a damn.
....that's why I think its important to treat your application, with all its components, as an integrative dynamic whole. Each section should feed off of and into the next (cross reference throughout!). Synthesize, and don't rely on any one piece to carry you through.