The smoking would bother me.
The rest is indeed a very good excercise for the student. I love the way the FI talks through every part of it explaining, telling the student to clear the tail rotor, etc.
The most scary thing to me would be the people on the ground walking towards the machine as you never know how they will behave and there are rotating parts.
They used an opportunity to use the helicopter as the utility machine it is, showing flexibility and thinking out of the box while maintaining good SA. That student will never forget the lessons of that trip.