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Constraint satisfaction problems are an important area of computer science. Many of these problems are in the complexity class NP which is exponentially hard for all known methods, both for worst cases and often typical. Fundamentally, the lack of any guided local minimum escape method ensures the hardness of both exact and approximate optimization classically, but the intuitive mechanism for approximation hardness in quantum algorithms based on Hamiltonian time evolution is poorly understood. We explore this question using the prototypically hard MAX-3-XORSAT problem class. We conclude that the mechanisms for quantum exact and approximation hardness are fundamentally distinct. We qualitatively identify why traditional methods such as quantum adiabatic optimization are not good approximation algorithms. We propose a new spectral folding optimization method that does not suffer from these issues and study it analytically and numerically. We consider random rank-3 hypergraphs including extremal planted solution instances, where the ground state satisfies an anomalously high fraction of constraints compared to truly random problems. We show that, if we define the energy to be E=Nunsat−Nsat, then spectrally folded quantum optimization will return states with energy E≤AEGS (where EGS is the ground state energy) in polynomial time, where conservatively, A≃0.6. We thoroughly benchmark variations of spectrally folded quantum optimization for random classically approximation-hard (planted solution) instances in simulation, and find performance consistent with this prediction. We do not claim that this approximation guarantee holds for all possible hypergraphs, though our algorithm's mechanism can likely generalize widely. These results suggest that quantum computers are more powerful for approximate optimization than had been previously assumed.