Where I took it. (Motorcycle Safety School, Bronx, NY) They tell you that if you drop the bike, you're going to have to sit out. I don't think it's a "bye, see ya.. dont let the door hit you in the ass on the way out" .. From what I understand, it's more like "with the way you're riding, you pose a danger to the other students if you're on the range with them at the same time." and they schedule you back at another time that's less busy or try to sign you up for a private lesson or two before continuing with the brc.
Before I took my class, I took one private lesson (they recommend 3, but I only found in time to take one.) While waiting for my lesson, I was watching a BRC taking place on another part of the range and this meathead, high sides when doing the abrupt stop. He leaps clear as the bike hits the ground, and stumbles on to all fours. After he recovers.. he swears,hits his palm with his fist and starts to walk away from the bike.. just leaving it there. They made him come back, pick up the bike before they would walk it off to examine it. He watched the rest of the course from the sidelines. Theres was another girl who, dropped a bike when she got back to the staging area pretty much standing still. Noone forced her off. I think sometimes it's more of an overall assessment than the drop incident. The drop incident could just be the final straw.