Wow that really is shocking. 1 it's wrong to cheat(!), 2 if they were found to be dyslexic (falsely) they may have to disclose it on all future job applications etc, and 3, you're right, it demeans the disorder. Just for the sake of a few extra minutes in an exam! Are you maiking a complaint?
I have already complained to the school about a variety of different things and with this as well...I'm also going to inform the LEA. I'm sure this is to do with money. My daughter has been put in lower sets; the most she can get is a C and so she doesn't bother! How bad is that?!