The purpose of this is to make sure that a student won't fail for the year because they have a single, or even a second bad marking period. It's designed to encourage student to improve rather than saying "there's no way I can pass for the year."
I think there are very important benefits to this policy as well as some serious drawbacks. The majority of teachers override and replace grades that are below 50 in the grade book. I used to do this.
Now, I add an assignment to each marking period. It's called "Grade Boost" and is worth 0 points. In the description, I write "points needed for student to receive district mandated minimum."
While I agree that a grade shouldn't be irrevocably damaged by a single bad marking period, I also think it's important to accurately report progress. Missing a passing grade by a few points is a very different thing than missing it by 30%. The interventions needed are very different.
This marking period, almost half of my Astronomy students needed points given to them so they would receive a 50.
As I was going through my grade book adding these in, I also noticed something interesting. While many of my students earned (significantly) below 50% for the marking period, there was very few who earned C's and even fewer who earned D's.
The breakdown looks like a parabola, with lots of grades on the ends and very few in the middle. Looking at the names, there are very few surprises. The students who complete assignments by the due dates have done well and those who haven't, haven't.
Data makes it much easier for me to see my own level of responsibility.