Wow! I am going to add another voice to the set of suprised ones here. It sounds as though you have gone over the results of the events that occurred enough already, so I won't go over you and your buddie's decisions.
I am surprised that the instructor put such task loading on you at such an early stage. You are still getting to grips with the basics when you are at the confined water stage, and I would reckon this was more important than mastering much more complicated manoevers than necessary at this point. Especially the fact that it was timed!! Nothing like a stop watch to induce a whole load of stress. What happens to the old "stop think act" method if you are on the clock?
I can remember both my buddie and myself being a little anxious about our kit exchange during our Divemaster course, so can't imagine how it must have felt for a novice diver. As it was, the whole event for me, was both challenging and great fun, but that is after having had over 100 normal, stress-free dives under my belt, and an exceptional buddie with whom I felt we made a great team.
Anyway, I'm really glad you both rose to the challenge, survived the incident unscathed, and that you are continuing your dive education, which can only be a good thing. As someone else mentioned, you were both new divers, so having to use your judgement as well as get used to the wholly different underwater experience, was a pretty tough call. It is good to be challenged, however not so much that you give up or worse have an accident.
Hope you enjoy your further courses and any diving that you do in the meantime.