So, no documents are required for any visa interview these days at US embassy KTM ? How do they make decisions then ? How do they judge a student trying to obtain a Student Visa if they don't look at any documents ?

Doesn't make any sense to me.

Those consulars know what doesn't make sense is all fake financial documents people used to submit. That's why they scrapped it.

no one knows. it's just 50/50.

what about Academic Records ? Do students show their Academic records or even that's not allowed ? How do they judge a qualifying student without their academic records ? Bank balance is different thing.

This issue was decided last year, so it is not all that new. However, the link below might be beneficial to understand better as to why and what forms of documents are still needed.

Cheers...
http://kathmandupost.ekantipur.com/news/2016-05-18/us-embassy-reduces-document-burden-for-visa-applicants.html