I've been teaching in VA for a while and have never, ever heard of a substitution, EXCEPT, this one. If a student fails the SOL and PASSES the AP exam, the AP exam can substitute for the SOL. But if you fail the SOL, you ain't passing the AP.
And as far as massive amounts of kids failing? Not going to happen in most counties. Just look at the most recent SOL scores from last year. If your county had a good pass rate in 11th grade, those kids who failed get to retake the test and many, many will pass it. Now if you are talking about inner city Richmond? Well, I'll grant you those kids are in a world of hurt. If you start kindergarten 5 years behind, it's hard to ever catch up.
This isn't a local thing, it's VADOE defined.
The vocational certification substitutes are defined in this document (towards the back) from the VADOE website. There are some rigorous certifications, to be sure (i.e. A+...), but "cosmetology", "nail technicion"? As substitutes for Algebra, or Biology? Oh yea, that's holding these graduates to high standards.