I would guess they thought they were "free lunging."
At our therapeutic riding program, we had a volunteer who would help exercise horses. He was an older gentleman who had been around horses a long time, so no one really paid much attention. One day, an instructor happened to be in the ring during his "free lunging" session, which involved him doing just what you described, chasing an older mare with a lunge whip, around and around the ring until she was in a full canter (this was an older mare who physically wouldn't be asked to canter under saddle).
I'm all for free lunging when done correctly and with purpose, but this- and what you're describing- sound like people who think they are getting the horse to exercise without really understanding what they're doing.
We no longer have volunteers lunging horses.