That sounds like your are from Arthur Murrays.
Why would AM instructors do this? You have paid $$$$ to do a comp with them that would have cost you 1/2 that price or less out the AM world. They want to make sure you have a goooood time to keep coming back.
Independent teachers do what they wish. Nothing wrong meeting up at event parties or group dinners with students. I know 1 guy who took his instructor to Peru for 2 weeks after they got through with a competition in South America. It was a trip of a life time for her. We all got to live the trip with them through FB photos. She has a very secure boyfriend and they are both the instructor and student are upstanding people.
What is creepy is for a student to sleep their way up the chain of dance instructors. Also an instructor who hits up students to sleep with them. Its a small world and everyone knows what everyone is doing. Think long and hard on your actions. It could very well affect who wishes to socialize with you/or who wishes to take instruction from you.