This seems like a practice that would work for some students and hurt others. Some students may not do well with a particular teacher. Being stuck for years with that teacher is a disservice to the student.
That one student should be able to switch to a different group. If all want to switch then there's a problem with the instructor. Let's look at the opposite end of the spectrum. Student loves an instructor but is needlessly switched to someone new. My point though is that the flexibility to change or stay in the same group should exist.
I suspect the vast majority of students will choose to stay with the current teacher, even if a very poor fit for them, because of that.