Professor using student paper as an example of what not to do in class? So a professor used a grad student's paper (anonymously) as an example of what not to do or what she doesn't want to see in the papers. The student was blindsided as the student wasn't notified that his paper would be used as an example, the student hasn't received a grade yet, and was not giving any corrections.
What would be a good way to handle this situation?
This sort of behavior by a professor is poor pedagogical technique and, in many cultures, poor etiquette.  It is not misconduct and it is not rule breaking.  If you are a student and a professor acts this way, you can criticise the behavior in any anonymous teaching evaluations.  Otherwise, ignore it and move on.
Receiving criticism, including bad quality criticism, is part of academic life.