Whoever made this test was high af

Scrambled works.

Then they have all the given letters and it isn't too difficult as the students would likely know what words they are looking for.

True but they still have to figure them out which will help to set it in their minds how the words really go, and it's better than having the words just sitting there with no challenge whatsoever. Also for extra difficulty, extra letters could be added to the scrambled words and they would need to figure out which letters to leave out.