I got to use something similar with the ISMT system at Camp Lejeune (as a NJROTC cadet when I was in highschool). It was for MP training, it used an M9 hooked up to an air compressor to simulate recoil. It presented those shoot or no shoot scenarios... I was very proud of myself when I carried out a successful mozambique drill on a woman before she could get the pistol out of her purse
We also got to shoot all kinds of other things but in combat scenarios, not shoot-or-no-shoot. Mk. 19, M2, M240B, M249... Lots of fun, if I had an ISMT I'd never get anything else done!
Also one day I went back to my HS to visit my NJROTC instructors and there was an army recruiter there with a setup similar to what you describe but with an M4. He was really just there to give the cadets a good time. He had been a designated marksman, and I had been on the njrotc rifle team so I challenged him to a match and he loaded up a scenario where you just shoot for score at 50, 100 and 150 yards. I beat him by 1 point