Yes, its good to do this type of thing to him and also to start at the top and work your way down. If you get a guy off the street who wants to "test" himself, he's going to be a spazzy douche thats going to try adn do whatevre he can to catch/hurt the other person if he can. If you start him with a white belt, like was mentioned hes going to have mroe gas to try and muscle through things. last thing you need is him injuring any of your regular students.
At our shcool, any new person is automatically paired up with either a purple adn above or a bigger blue belt. Not only to help him work his way through techniques but also to keep the guy in check if need be.
About every other month, we get a douche bag back coming by our school to "test" themselves.Once and a while, one might last longer than a day. Over time he'll keep getting warned to calm it down adn stop spazzing. Once they start picking on easy prey, those smaller and who are white belts, and injuring a couple, people stop wnating to roll with ihm. So then he's stuck with the upper level guys. After a while they get tired of the elbows to the face and the knees to the balls, and they don't want to roll with him. Finally all thats left is the instructor who has already put a couple beatings on him but nothing too bad.
Dude steps over the line, sitting on the opposite side of the mats, calls out the instructor to roll with him, makes the instructor walk over to him, then proceeds to try adn "beat" him. The instructor takes the spazzing and muscling in stride, but after a couple of elbows to the face and kjnes to the balls, has enough and starts using the other guys "techniques" right back on him. In the end, the instructor is pissed, catches the guy with a submission, holds it out a couple seconds longer, just like the guy does to other people, then pushes him off, cusses him out, adn tells him to get out. Guy trys apologizing, then goes to tthe police to report the instructor.
F*ing BS
This is why you embarrass them and have them leave, so they never come back and try this sh*t.