The phrase on a case-by-case basis can mean sensitivity or unreviewable power.

Individual judgment is what lets a system treat people as people rather than as categories. It is also what lets a system be arbitrary without leaving a trace, because a decision made case by case has no published standard to be measured against. The same phrase covers a genuine kindness and an unaccountable power, and from outside they look identical.

When you hear it, ask what factors are considered and whether the reasoning will be given in writing. Those two questions separate the two meanings quickly. And if you exercise that kind of discretion, writing down your reasons is what keeps it the good version.