Proprietary malware accused a student of cheating in an exam, based on the fact that it saw her look down at her lap.

Merely installing that malware on your computer sabotages it. You can't trust it at all after that, though since it has to be running Windows, you couldn't trust it before that point either.

If a school wanted me to take a test this way with my computer, I would reply that that is both practically impossible (since my computer does not run Windows) and immoral (since no one should run malware).

I would agree to take the test on a computer run ny the school itself (if the school runs nonfree software on its computers, that hurts the school but not me) in a room set up by the school. That way the school could make sure I brought nothing to cheat with, and would know I'm not looking at other people or posters in the room.