I cannot imagine her reason for believing that "the approach puts into pupils' heads the idea that all risk and excitement is bad and that any form of challenge is stressful". Nothing could be further from the truth.
The true purpose of circle time is to help participants build a healthy level of self-esteem. That can be achieved by using a variety of strategies and activities, which provide experiences based on the five key elements of self-esteem. Taking risks and accepting challenges are vital ingredients of the elements, and in good circle times children are encouraged to face them with enthusiasm, learning to make wise decisions as they do so.
The benefits that children gain from circle times are legion. The positive qualities and assets that they accrue as they take part are immediate and valuable for their future lives.