Nobody does that at 'school' even post-16 - it's a University thing, because it's only really essential when your work is being exposed to an audience
Long time ago when I was in high school (in the paleolithic) my professor for literature routinely required correct citations in our works.
I found it quite useless at the time, until I understood its importance later on at university (even if I was in computer science).
The "funny" part was that she was too busy (or lazy) to actually check every citation: it was possible for you to invent your own quotes and authors.

Now with internet and very capable search engines at the service of such professor, it would be much harder to pull off such a prank.
Books are frequently a racket for professors. A professor that writes their own book then requires royalty payments for their own class is on shaky ethical grounds.
That happened in my university in Italy.
The professors for some courses where writing their own books and pretended that people bought a copy each.
One professor was really extreme.
At the beginning of the course he would sign your freshly bought copy of his course book.
At the final exam he would check each student book: it you didn't have this year signature it was an automatic fail at the exam.
Shaky ethical grounds?
I would say such professors should be banned from the teaching.
Plagiarism and cheating? Students should be removed from the university when caught for either. An automatic failure for the course being taken should be the minimum.
Maybe not at the first offense.
Not all students coming out of high-school perfectly understand the importance and severity of such offense.
I would say, fail the test at the first offense and more serious disciplinary actions for repeating offenses.