The best physics class that I've seen (and that I've taught) is the Physics 101 autotutorial class. Students get three chances to take each test, but they need to get a passing grade on each unit before they move on to the next. This is contrast to the usual physics course, where the average grade on a test might be 35, but they do it on a curve so that 35 gets you a B-.
The class is aimed at premed students, and experience shows that Physics 101 students do better on the MCAT than students who take a conventional class aimed at premeds. Because it's aimed at premeds, there's a heavy dose of fluid mechanics and other subjects that often get missed in intro physics.
It's particularly fun, as a teacher, to work with students to "debug" their thought process. So often I'd hear "I understand the concepts but can't do the problem" but then once they started explaining how they tried to solve it, I'd see that they missed important concepts.
"The code is right but something is coming out wrong" was one of the favorite things I would hear from my intro to programming students.
I would call them out on it, too. The attitude they had was part of why they couldn't debug their program. They needed to adopt a question-and-test-assumptions approach, which can be intellectually uncomfortable. I hoped that by explaining to them why that comment was obviously wrong that they could start to learn the debugging process without me walking them through it, constantly asking pointed questions.
I think it's important for students to have critical self-feedback alone. The problem with tests (generally) is that it's feedback for the student (which is good) but also feedback for the teacher, with grades with implications. So basically you have to get everything the first time, and to pace and time that is tricky.
I do like your approach, as it does not penalize you for trying hard, even if you reach deadends, or made some assumptions that can be sniffed out easily by a test. My physics professor did a variation of this sort, where the final consists of all the topics, and your previous test grades gets overwritten by the final if the final grade is higher.
The class is aimed at premed students, and experience shows that Physics 101 students do better on the MCAT than students who take a conventional class aimed at premeds. Because it's aimed at premeds, there's a heavy dose of fluid mechanics and other subjects that often get missed in intro physics.
It's particularly fun, as a teacher, to work with students to "debug" their thought process. So often I'd hear "I understand the concepts but can't do the problem" but then once they started explaining how they tried to solve it, I'd see that they missed important concepts.