I was an assistant teacher at a private engineering school, teaching a toy kernel project.
We had to add a new significant assignment which was the student sitting down next to me and we both look at their code and I ask questions.
Our policy for the project wasn't even anti AI, it was simply "do not submit code you do not understand" so obviously we had to test understanding, but already with 90 students it was hard, I don't know how you would manage something like this with 500