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I'm going to answer this based on reading the information on the UVA website.
It seems like the Jefferson Scholarship lags behind the admissions process of all 3 admissions types ED, EA, and RD because awards are determined Mid April and the decision dates for ED, EA, and RD are 12/15, 1/31, and April 1 respectively. Since there are on-site campus activities for the JS award in Mid March, certainly ED and EA applicants will have been admitted prior to UVA culling down the finalists round from 120 to the 32.
Since UVA acceptance rates are 32.5% for in states and 15.4% for out of state and this JS program only has an acceptance rate of 1.6% (32/2000 applicants), I don't think the 2000 people that apply to the JS program get a nod from admissions just because they apply to it because 98.4% of them get rejected.
Personally I think its the other way around. Once the admissions teams see your file and recognize whether or not you meet and exceed the requirements to be admitted, they write all kinds of notes in your file. Since the JS process is stated to be an independent process with its own rules and deadlines etc, once they do the first pass to get 2000 to something more manageable like 400, perhaps they ask the Admissions office to see those 400 files so they can further cut the list to 120 finalists.
I don't think they get into a situation where they they 2000 JS applications, tell the admitting office that these are the best kids and then the admissions office uses the JS application readers' input to figure out who to admit. A lot of JS applicants are not going to get the award and many of them will also not be admitted to UVA either. So the JS team doesn't want to be in a position to give the award to someone that gets rejected by the main Admissions team. I think its the other way around. If the AO team feels the admit is a great person and that supports he/she/they get the JS award, then everyone is happy.
Just out of curiosity, why do you think this is such a popular scholarship? 1.6% is not good odds. Wouldn't the same pool of people rather apply to the 8 Ivys, Stanford, UChicago, MIT, Caltech, etc. with better odds and take out a loan if they got in? Nothing personal, I'm just interested in who the 2000 people are since the stats and resume they need to get the award might even be harder than admissions at T10-T15 schools.
I hope my answer made some sense. And good luck with your college admissions process.