In reply to The_flying_climber:
The short answer for the short question:
As long as you feel safe, I suppose it's okay. You have signed him/her in, so it's your responsibility. However, I would not do that again. I climbed easy 5/6a something like 3-5 meters and decided to go down as I didn't feel comfortable with my friend's belaying.
I would ask someone else to hold the rope. Just in case. If I am teaching someone, I always keep my hands on rope, too. I firstly make sure they are can belay properly, catch a fall, lower the climber, etc. before I let them do that by themselves. I have taught more than 10 climbers to top-rope safely in last few months and they are all competent.
For the long question, I would say it's unacceptable for both mentioned climbers and staff. I have seen similar situation: crab clipped into tie-in point, "dead rope end" facing the belayer, braking hand above the belay device... I was bouldering just few meters away and decided to help them. One climber was more experienced, but still had no idea what he was doing. Two other people helped me to explain what's going on (my English is not perfect, so I appreciated that). In the end, I had to leave and decided to report it to staff. We came back and we saw that there was already another staff member advising them.
However, I always make sure I know that I am right before "stepping in" such situation. I have told in this forum already, but I was told that I had been using BD ATC XP belay device "upside down". It wasn't upside down as I was told by a young climber, I used the belay device in low friction mode, which is totally acceptable while top-roping on an older rope with not too heavy climber. That climber also had the same belay device and he felt quite irritated in front of his friend.