I used to be a Disney Princess and still have friends in the entertainment industries including lots of people who run hometown dance studios and stage schools. Most of them do Disney or Musical/Movie Themed holiday camps.
There’s a very very good chance this school you are mentioning is PERFECTLY legal and above board. You can stage a performance including a certain number of songs from one show without licensing permission. You can stage the full Disney versions of musicals of Aladdin, The Little Mermaid, Moana etc for child and youth groups for a licence fee. The original source material ie The Snow Queen, Cinderella is all well out of copyright now so classes based on those plus a few songs from the Disney musicals would not incur any fees.
I’ve performed in holiday venues where whole shows were marketed around The Greatest Showman or Frozen. We could only include a certain number of songs or a time limited amount, couldn’t wear certain costume, couldn’t refer to ourselves as “Barnum” or “Elsa” or whatever but some of these Entertainment venues and companies were close to being as big as Disney and it was all completely legal and above aboard.
With these Princess appearance companies that most U.K. towns have now, you can’t refer to the Princesses or market them as their Disney names, even if they are clearly wearing the same costume as their Disney counterparts. So Aurora might become “Princess Beauty” or “Beautiful Princess” (which gets confusing in a company where Belle is also on the books!), Elsa and Anna become “The Snow Sisters”, Moana is “Polynesian Princess”. This is usually just for marketing or advertising purposes. Once at the venue, the children usually use the Disney names but the actors shouldn’t really say “Hi, I’m Belle” for example.
It’s complex but it is allowable.
Your friend sounds unhinged.