isn't that an argument to say "why bother with exams at all?" and get tutors and lecturers to continually assess their students and award them an appropriate "mark" at the end of the course?
Good question ShatnersWig. My department doesn't do these sorts of exams: unseen & timed. We have other ways of testing students' learning on their feet and under stress. We use practical testing, vivas, presentations and so on. We offer a variety of assessment styles to try to ensure we cover students' diverse learning styles, and not favour one style of learning and demonstration of that learning over others. (Although in current discussions with undergrads about some of their demands re our programme, we are mentioning the "traditional exam" as a possibility - it's making them reflect more responsibly on the current range of assessment types, and see the merits in them!)
However, exams can be useful in a number of ways. They ensure that students aren't getting inappropriate help like the mother of a student of mine who pretty well wrote his essays or plagiarising or buying essays from a criminal essay mill. Although I am continually shocked by the underhand cheating that goes on. I sit on a disciplinary panel outside my own Faculty, and every year we interview cheating students. The lengths they go to are shocking, and frankly, disgusting. A tiny minority, thankfully. If it were up to me, I'd chuck them out without a degree, but usually the disciplinary response is simply to drop the degree classification by one grade - so a 2,i becomes a 2, ii and so on.
It's better not to cheat, basically. But we are overly lenient on cheats & plagiarisers in my view. Hmmm, this is the other side of this whole thread, isn't it? The real crimes of a tiny minority of students. But there are more deliberately cheating students, than administrative/academic errors, frankly.
Anyway ... Exams can also model 'real world' situations in some ways: a big 20 page document lands on your desk - your boss says, "I need a 1 page summary, and a 1 page outline of a draft response by Friday" - there's an exam-style situation. Or a barrister's brief, or a complex legal contract.
Exams can test the understanding of material under stress - a good thing for engineers, doctors, and nurses, I'd have thought?