As a manager I found testing useful. I generally tried to do it in a low key way. Even if I was with other officers, I would try to visit with individual employees one-on-one to avoid potentially embarrassing them in front of other managers or peers if we didn’t observe what we should have observed. The most entertaining was joint testing with managers from other railroads on joint track.
I agree with Jack, in that signal tests were the most realistic. Unattended red flags in the middle of the night were a give away, but could still be useful.
As a T&E employee, though, I resented them. I was lucky in that I consistently managed to avoid the infamous stump the stump question sessions associated with “Lacy’s raiders.” The closest I came was one night at Morgan Hill when I was a brakeman one a Pool 4 crew. We knew it was a test and when we stopped I was off the caboose so fast “to inspect my train” that I was many car lengths away before the testers could arrive at the caboose to grill the conductor. We didn’t have personal radios then so there was no calling me back. Once I got far enough from the caboose, I slowed my “inspection” down so as not to arrive at the head end too quickly. Eventually, the brakes released before I reached the engines and the train pulled slowly forward until I could swing aboard, smug in the knowledge that had avoided what would have been my first introduction the W. J. Lacy.