An institution that reproduces systemic injustice cannot be rendered permissible merely by appealing to the rationality of those it harms, as Rawls himself acknowledged that just punishment presupposes just background institutions.

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Background institutions(the underlying systems that need to be just for punishment itself to be just): The foundational rules, laws, and organizations that shape how a whole society works—like the legal system, schools, and economic structures that determine people's basic opportunities.
Just punishment(contrasted with unjust or unfair punishment): Punishment that is fair and deserved, following proper rules and given for legitimate reasons—as opposed to punishment that's arbitrary or cruel.
Rawls(as the philosopher whose ideas are being referenced): John Rawls, a 20th-century philosopher famous for developing theories about justice and fairness in society.
Systemic injustice(describes the type of injustice the institution reproduces): Unfairness that's built into the rules and structures of a system itself, rather than caused by individual bad actors—like if a school's rules systematically disadvantage certain groups of students.

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