The situation is quite "simple" - the NZOC want to basically guarantee that all track and field representatives are capable of not just "making up the numbers" and hence have implemented a tougher standard though the criteria itself is illogical and is left up to far too much ambiguity and arbitrary interpretation by the selection panel. The entire selection criteria document it almost seems like was written by multiple people with differing opinions on what is considered worthy enough to be selected and just simply collated. Classic bureaucratic nonsense from people who think they are smart but aren't.
For example the criteria for first time athletes - they need only one of the following three for conditional selection (according to the selection document)
1) Ranked in the top 40 on the WA list (as if 5 places between 45 and 40 means anything at all and is any guarantee of a "worthy" performance)
2) Are "tracking positively" (which simply can't be a criteria on it's own so immediately there is a flaw in the criteria somehow nobody picked up on)
3) Have demonstrated that they are capable of achieving a Top 16 placing at the 2020 OGs
with the potential to achieve a Top 8 finish (again which makes no sense because the difference between being ranked 40th in the world and finishing top 16 - especially in deep, tough events like the sprints and middle distances is absolutely astronomical).
There is then the next section for returning athletes
1) Ranked in the top 32 (not 40 vs first time athletes which in a sensical situation should actually be reversed to where a returning athlete get's more leeway)
2) Demonstration of the capability to finish in the top 16 (and there is no context to this as I will show with the Willis selection).
Summary - it's just a cluster-f--k of confusing, poorly worded, poorly thought out criteria and caveats that one can't help but wonder is ultimately there to just make any selection completely at the personal discretion of whoever in the NZOC and whatever their agenda is (which could quite simply be saving $$$ which would be very, very tragic and probably why sport in NZ is limited to excellence in cricket and rugby with a few outliers every now and then).
And this has to be touched on because ironically the one athlete that really exposes the absurdity of this situation in NZ is one of their absolute greatest - Nick Willis. Willis doesn't fit the criteria for a returning athlete by way of ranking (he wasn't top 32 in the rankings) and was selected based off "ability to finish top 16". You can see the case right now - Willis, despite a PR of 3.29 very rarely entered Olympic Games with one of the top 12 times in the world prior to the games. He had the 13th best time going into Athens, 16th going in Beijing, 5th into London (probably and ironically his worst showing at an Olympics despite that ranking) and 17th going into Rio, but is of course one of the most savvy racers of all time and has 2 Olympic medals off being a master of being able to run 39.0 seconds for the last 300m. So of course the case is "Nick has the ability to finish top 16 because in the 3.37-38 style races with the big finish he's done it before." The problem here that look at those pre-championships bests and where they had him on the list - this year he is the 170th best. Rio was FIVE years ago. There is nothing objectively that points to him possibly having top 16 potential in THIS Olympic year. Sure there was a time where running 3.38 for him off 3.00 minutes at 1200 was easy - now he is running 3.38 maxing out and getting beaten by athletes not even close to Tokyo.
So really what we see here is the exposure of a selection policy that frames itself up as all about excellence and potential, but really is about who the NZOC thinks makes the best stories for them irrespective of that. It is heartbreaking to see athletes from that country, deemed good enough by the world governing body to compete get turned away, period. It could all be so simple yet for some reason isn't. Just pencil-pushers and know-it-alls that need to feel powerful and in control just getting in the way of their own feet and in the process shattering the dreams of young athletes and stunting the growth of the sport even more. Like what incentive is there to be a track and field athlete in that country now unless you have otherworldly talent straight away? None.