I remember at least one team having a similar melt down in the boardroom, but I think Karen's point was that they were behaving like that throughout.
It did strike me that maybe the task was unusually difficult? The tasks where they have to design things usually stretch the teams, but the brief was very vague, and there really wasn't much scope for the imagination in creating a new product for the beach.
Having said which - the book holder was a mad idea, for all the reasons given here and by the buyers.