I'd like to think it was so, but do you really think that this "younger student" really thought, "Wow, this teacher has integrity! And principles! That's interesting!"? Or was it instead a matter of not wanting to deal with Mom and Dad's meltdown over quitting? Or perhaps a matter of wanting that new shiny belt?
What was created was an environment of integrity, principle, and worth. Those things are best when they are provided invisibly without using the actual words to the student and without hitting them over the head with it.
His thoughts are his own and I don't guess at them. I will know if his respect for his own training is lasting by the training that follows his promotion. Same as with a grown-up.
Now, try to figure out what a grown-up is thinking with the golden carrot hanging in front of them...that would be interesting.