I think he went too far... unless of course your dojo practices newaza and head pinning is one of the techniques taught by your sensei. Fun though isn't it? I would have proceeded to tickle the yudansha till he taps
Still, if you do something, prepare to take responsibility for your actions. The yudansha did something to provoke the mudanshas response, live with it. In any case, during training, the sempai has to take responsibility if anything happens. Even though its not really his fault, he has the most responsibility to the mat and sensei. So he has to be doubly careful.
Interesting way of teaching anyway. What if by pure accident/or rage, the head pin became a choke and seriously injured the yudansha? Has the sensei taken into cognisance of this possibility? Or is it just going to be one of those 'you learn martial arts, prepare to be hurt' kinda thing?