So, lesson learnt, almost the hard way. And one that I carried over when I became a 'technical' instructor. That is I would announce what drill/s we would do / what 'emergency' may take place pre-dive, but not when. (And so yes, back to the topic at hand, I still think turning off someones o2 unannounced, especially to a student on a re-breather, is asinine!)
So to answer the 'question' posed - Is it unexpected when it is briefed? - yes it can be if the drill is made aware of pre-dive, but not when it may / will take place during the dive. That way then keeps em' on their toes the whole dive.
That's a scary story, but I don't see how it relates to the teaching technique of turning off the O2 of a student without telling them ahead of time that you are going to do it.
I'm not an instructor, and you are, so I respect your experience. But I have to disagree with you on this point.
Telling a student that at some point in the dive you will turn off their O2 completely eliminates the value of this teaching method. If they know it is coming, they will be watching for it. The whole point is that the student needs to experience the reality of a major cause of rebreather accidents in a controlled situation, where the instructor has plenty of time to fix it if the student doesn't pick up on what is happening. You are teaching the student to be aware of this problem, not just how to turn the O2 back on.
In fact, doing this drill might prevent accidents like this one - which was the accident that originally started the thread that this one branched off from:
Ashley Porsche Bugge