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When you are marked for distinction, it means you are someone who is going to do well in life. You will set yourself apart from others.
Distinction means being set apart, often by excellence. When things are distinct from one another, they are different.
Distinction usually means a sign of real accomplishment.
Pass means doing it and actually achieving what you have done. But when pass is with distinction, it means you passed but not just passed, you put your effort, skill and talent in whatever you were doing. It means you over achieved!