For example, Dickinson College in Pennsylvania admits 13 percent of its students without their submitting their SAT/ACT scores. So, when it reports its 25th and 75th percentile tests scores to US News & World Report's rating system, it's really reporting more like its 38th and 88th percentiles, giving it an artificial leg up on the competition. Plus, "test optional" attracts more applications, most of which get rejected, making the college appear more selective and exclusive.
The article explains that Muhlenberg, a college that Thomas Sowell has cited over the years for its integrity, is one of the rare test optional schools that tracks down the test scores of admitted freshmen and includes them in the numbers it submits to USN&WR.
In practice, "test optional" is probably mostly used to admit athletes, donor's scions, celebrities' children, and affirmative action kids. Since many of those are recruited through face to face meetings, I would hardly be surprised if the test scores were "shown" to admissions officers even if not formally "submitted."