What is the function or role of a propaedeutic diploma (in e.g. The Netherlands)? I recently came across the term "propaedeutic diploma" in the CV of a Dutch academic. According to Wikipedia, it's a diploma given for successfully completing the first year of university study, and used by many (how widespread is the practice?) institutions.

Does it also have a formal function, or is it just a tradition at this point?

For example, would progressing to second year courses be tied to earning this diploma? If it is, why is a diploma used rather than a simple cutoff in terms of credits earned?




Note: Yes, this is ostensibly a question specific to undergraduate education, but it's not about admissions or "undergraduate life". Rather, it's an attempt to understand a specific academic system, which I hope should be considered on-topic.
The propaedeutic diploma is awarded after completing all the requirements for the first year of studies. Not all universities in the Netherlands award it, and its importance seems to be less since Bologna has introduced the bachelor/master system in the Netherlands. Before it was the only diploma/certificate until completing the full four or five years for a university study. Obtaining it in reasonable time could be seen as a sign that normally one should be able to complete the full studies, and hence nowadays it is also used as a selective tool, as is mentioned in @cag51's answer.

It does not carry much value and is not seen as a terminal degree. The only exception is for students studying in professional education ("hoger beroepsonderwijs", in English these institutions normally call themselves "Universities of Applied Sciences"). In that case, the diploma can be used to be admitted to a university. To understand this, one should know that in the Netherlands, from 12 years old secondary education is split into four different levels, and only the highest level gives access to universities.