If Naruto fails the academy in fanfiction, he might face a lot of disappointment from the villagers. They already look down on him, and this could make it worse. He might also lose confidence in himself and his dream of becoming Hokage could seem even more out of reach.
Naruto's character could become more determined. Failing the academy might be the push he needs to work harder. He might become more self - reliant and less reliant on the approval of others.
It can change the power dynamics. If Kakashi fails Naruto, Naruto may not reach his full potential as quickly or at all. This could mean that some of the battles in the Naruto universe are lost or are much more difficult. For example, against Pain or Madara, Naruto might not be strong enough without proper guidance from Kakashi.
One possible scenario could be Kakashi fails to train Naruto properly. Maybe he misses some crucial aspects of Naruto's development, like not focusing enough on his chakra control early on. Another could be that Kakashi fails in a mission where Naruto is involved, perhaps due to miscommunication or underestimating the enemy.
One possible reason could be that Naruto faced an extremely tough opponent in the exam. Maybe the opponent had some special jutsu or skills that Naruto couldn't counter at that time. Another reason might be that Naruto made a critical mistake during the exam, like being overconfident and underestimating his enemy.
Perhaps in this fanfiction, Naruto fails the genin test due to external factors. Say, there's some sort of interference from a hidden enemy. This enemy might have used a genjutsu on Naruto right before the test, making him see things that aren't there or confusing his mind. So, even though Naruto has the skills, he just can't perform well during the test and fails as a result.
Well, perhaps in this fanfiction, Naruto fails the bell test because of external distractions. For example, some unexpected enemy ninjas could show up during the test. Naruto, being the hot - headed and impulsive one, gets distracted by the need to protect his teammates from these new threats instead of focusing on the bells. Also, it could be that Kakashi is much stricter in this version. He doesn't give any leeway or second chances, and Naruto just doesn't meet the mark.
It could be someone from within the village who doesn't want Naruto to succeed. Maybe a jealous rival among the other genin candidates. This person might have set up some sort of trap for Naruto during the test, causing him to fail.
He might become more determined. After failing, Naruto could realize his weaknesses and be more eager to improve. He may start training harder than ever, focusing on the areas where he lacked during the exam.