I've never heard of anything like this, it sounds abominable and I would not ever consider leaving my child at such a place no matter how much I needed daycare.
My centre are absolutely wonderful and asked me when my son naps, when he has his bottle(s) (which I provided) and if he has any dietary needs/preferences. I don't leave him a full day anyway, but they work around the babies routines etc and have full write-ups of exactly when the bubs slept, ate, drank, activities they did etc each day for parents to view.
I know the girls who work there all quite well now (one is my sister) and I couldn't praise them highly enough for the care they take with DS - he loves going to 'school'.
The example in this thread is extreme, and seems unreal to me. But it's up to US AS PARENTS to decide which centre our children go to, so don't send your kids there if you don't like it - it's that simple!
Personally I think it shouldn't be allowed and should be shut down or forced to change it's policy!