I think this would be an excellent experience for a budding young musician - but yes, they would be getting ripped off, no doubt about it.
Reminds of my local summer music festival. Hundreds of bands on in all the village pubs (about 6) all day Friday through to bank holiday Monday. The village centre is absolutely rammed with hundreds of punters. I've played it a couple of times and its a fun event - but no one gets paid. It's just an excuse for the bar owners to make a killing and pray on enthusiastic musicians joy of playing live.