Students learn several very valuable things during a simulated rope break.
1. they have (at least) a 3 second "oh, ****", factor where they don't
do anything until the reality sets in. I had one student that froze and
did nothing at all.
2. they don't get the nose down fast enough, far enough - even after
they recognize and react to the situation.

As others have pointed out, you have to be careful. On a hot humid day
when you're still far away from the airport at 200, the exercise might
best be postponed. I've found that on a normal day, a rope break at 275
(which is what I typically do)or so gives you an extra margin of safety
and still gets the point across - and spoilers will be needed to not
over-run the airport.

Tony