Yes, it would have made substantially more sense to wait a year and properly prepare for graduate school. You are right that it will likely affect the admissions decision, as it should.

Why did you even submit an application if you knew you wouldn't be able to complete the prerequisites or get your materials in on time?

I actually don't think it will make too big of a difference as far as the admissions committee is concerned. If there is any possible way that you can get those pre-reqs before starting school, then you should technically be eligible for review. If you are a better candidate than someone else who DID do those pre-reqs, I don't think they will choose the pre-reqs over a better potential student. I can be wrong though, that's just where I feel like their priorities lie.

I see your point, but I disagree.

Prerequisites like this are listed for a valid reason; the program wants its incoming class to be able to immediately engage with certain set of concepts without having to catch anyone up. Some kind of baseline of common understanding allows faculty a much wider latitude to structure their pedagogical approaches, and it allows for a more advanced starting point in an already accelerated academic process (assuming we're talking about M.Arch I students without backgrounds in architecture).

If it's possible to complete prerequisite coursework before starting the program, I agree that s/he should be eligible for review, but the fact that s/he dove headlong into an application without actually being prepared to do so should reflect on his/her preparedness for graduate education. And it should be a factor in the admissions process.

This, combined with the original poster's other posts that clearly prioritize the Ivy-ness/ranking of architecture schools over all else, makes me think this applicant likely needs to reconsider his/her motivation and readiness for this path.