I'm not personally sure, on the one hand, while it is a brutal environment, it is a safe environment, and the characters engaged in the training know that. Because of that, there are things that they won't be able to properly experience compared to an unsafe environment. It will be less stressful (though still stressful I imagine), and they will likely have a clearer head, because nobody's life is at risk, as opposed to field work, where every decision you make could be a life or death choice.

On the other hand, learning how to cope with pain is also an experience, as well as the training itself, which most guard go through anyway in "normal" training, so really the only advantage this has, is giving people a larger pain threshold, so with that in mind, I think the best way to handle this would be to actually treat it as a legendary site (from complete scoundrel) that gives the character improved toughness for more HP and/or the great fortitude feat for more fort save.