Oh, gawd...
OP, where do you draw the line? Exercises like this really engage children and get them thinking and working in a way which "normal" exercises don't. There have been some fabulous ones I've heard about over the years, including alien kidnap, monster footprints being found in the car park, dinosaur bones, the school being sold, students having to do extra hours, loads of things.
If you don't think teachers should EVER lie, what about "Miss, isn't this drawing brilliant?" "Why, no, Timothy, your drawing of a house just looks like a red scrawl on the page - I mean, where on earth are walls or windows or anything else?! Silly boy!" Or Santa, the Easter Bunny, the Tooth Fairy, magic, make believe - even religion?
They've highlighted they should have told the parents quicker but this would be the only (if any) criticism I think any sane person would have