I think this is probably a two way thing. When first starting training, if you're keen you can become proud and protective of what you are doing and where you are doing it. Sometimes a student might hear what they want to hear or just pick up on key words being said. Like, Champion and knock out. They have nothing to compare things to. So for them, their doing it with the best.
Instructors at whatever level will talk to their students. I imagine doing so in an encouraging, enthusiastic and positive mannor,probably hyping things up a bit. The instructor may genuinely be proud of what they have done and feel that for the level of their class they are more than experienced enough.
If the student develops well and seeks more in their training, they will move on looking for what they think or know they need. Possibly in moving gyms they will want to protect their only training experience. Even just a little?

Unless they really don't like their old instructor and feel they have wasted a few months of their life. The new instructor would love that.

Just my take on it. I could be completely wrong.

Cheers