Thanks for the feedback here, we've been making improvements to the user interface for Unit Test exercises, and it looks like there are still confusing parts to it.
The reason we use Unit Tests for the Methods lessons is that we want to focus on testing methods, rather than full Java programs. Unit Tests get right to the point, are more straightforward than having students write full Java classes, and are commonly used for testing code in the real world. It's not just about hiding the more advanced code. Using Unit Tests to test your methods in isolation is a common practice in software development.
It's a little confusing at the start, but once you understand the difference between the Unit Test and a full Java program, it actually becomes much simpler to complete and grade the exercise. The Scratchpad.java was only added so that students could write their own tests in addition to the tests provided in the Grader tab, in order to help them debug their method.
We'll keep working on making the interface for unit tests more clear. In the meantime, stress to your students that the Scratchpad.java file is not part of the graded exercise, it is only there as scratch paper on the side. To run the scratchpad program, students should use the Run tab. To run their actual method that the exercise asks them to write, they should write their method in the Unit Test, and run it in the Grade tab. You can see which values will be used on your method in the Grade tab, as well as in the Scratchpad.
Hope that helps!