Eiro observed the two students that were currently duelling in front of him. Of course, he would make sure that nobody would receive any serious damage, and immediately heal any damage that they did end up receiving during the fights.
But at the end of the day, the fights were more than just useful for not only Eiro, but the children as well. Eiro was able to see what areas he needed to focus his teaching on, and the students knew where they lacked. With the five-point system that Eiro explained to them earlier, the Demon figured that they should be able to improve relatively easily.
It did seem like Eiro's assumptions were correct. In the area of 'bravery', all of them were lacking extremely, with the exception of Arc. They were scared of injuring the person in front of them during the fight. For those without experience, and especially those most compassionate, it was incredibly tough to get a good score in this category.