A years-long probe into widespread academic fraud in North Carolina’s athletic program, including its storied basketball powerhouse, reached an unexpected end on Friday when the NCAA announced it would not issue major sanctions against the school.

The prolonged investigation focused on a major at the university, African and Afro-American Studies, where about 1,500 athletes over 18 years took advantage to make good grades with little to no work involved. The university’s defense did not focus on the legitimacy of the courses—the...