If you are not using grades, you do not need to touch the grade letters. They are only used for display purposes anyway, so if you hide the gradebook from your students, they will never see any grades.
You can do this in each course, by editing the course settings, and unticking "Show gradebook to students".
The grading mechanism will still occur in the background, but you can safely ignore it.
Gradebook
Setting grade letter site-level defaults problem
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