My initial thoughts are that I basically agree with the intent of the exercise but I think the exercise itself could cause some potential problems. I think the point about NOT stopping is actually an important one.
Agree 100%!This was a big problem for me when younger. I used to always stop whenever i played something wrong when i practised. I restarted, either from that bar or from the beginning until i got that part right...I did this for a long time, until i got a new teacher... around age 12 or so.It didn't took long before she noticed this behaviour of mine and told me to never stop at a mistake but play on as it didn't happen... just like you would in a performance.It took me quite some time getting rid of this habit, actually even today i sometimes feel the urge to stop!Well, the result was that i was much more secure during performances! Doing a small mistake didn't throw me off nearly as much as it did before.Make a mental note of a problem area, play on and then practise that spot afterwards... my 2 cents.