It's not, it's just a different style, "full immersion" where you have no clue what is going on and they think at some point you'll understand. I don't think it works well but whatever. Best is to pay for a trip to some remote area speaking only the target language and force yourself to understand it quickly, swim or sink.
Do you think an environment like this in say, VR, has merit?
No idea, if you can survive with VR goggles for hours, and you have reasonable VR partners not trying to teach you all kinds of slang and swearwords, then maybe.