I don't generally get why tests are designed to rush a student. Is speed a proxy for understanding?

Speed is part of fluency. Fluency and understanding feel related

I meant to say they usually aren’t a rush for non-ace students, just a full hour. You have to work diligently, though. Competitive tests excepted, obviously.

Well, to some extent, yes. Of course the literal number of works you can write per minute is not, but:

- someone with a good understanding will often come to a concise, clear answer while someone struggling will produce a convoluted paragraph.

- the way to get to the result will vary depending on your understanding (e.g., are you blindly applying some method or understanding what's going on). For instance, "hey, this is a vector field, I don't need to evaluate this complex integral, I just need to compute the difference between the start and endpoint of the curve!". Both answers will be correct, but one denotes a much better actual understanding (and will take way less time).

I literally explained this above. No one is trying to rush the students or punish the slowest writers. It's because time is finite and having tests sized so that it's impossible for the slowest test-taker to even feel rushed means that the test time period needs to be much longer. That means higher costs for paying the proctor and makes them much harder to schedule since you need enough very long non-overlapping test periods that every standard class scheduling slot has a corresponding exam period (and think of midterms -- those often have to fit in a standard class period, or else if someone takes longer, that might blow through another class).