The pros of such a practice is that the students are simply more prepared for the real world through this system. They learn to deal with conflicts and problems that wouldn't normally deal with if they were in a conventional program. Because of this, students will have more experience in team environments.
The cons to such a system is that it might be too much of a job environment. Working long office-hours being assigned to a cubicle to work on assignments and projects could seem too much like an actual job. Except that the students are paying the school.
Although there are cons to this system, it is far outweighed by the pros. Queens University is differentiating themselves from other schools, and it's working. Why else would they be ranked as the top MBA program in the world.