Instructor listening in secretly in simulated intake assignment -- allowed? Ethical?
I have to side with your professor here. You did not have a private phone conversation. You had a simulated conversation with a person you knew to be a fake client with the purpose of evaluating your skill. If the professor listens in to the conversation that means he will evaluate you himself instead of relying on the person he got to play the potential client. This is good for you. 

I honestly don't see what the problem is, you did something that you knew to be a test, so your professor gets to see/hear it to evaluate you. If instead of doing this over the phone this would have been a live interview, would you feel different about your professor listining in?