There are just too many kids in each class. It does not surprise me that teachers are having trouble keeping track, but his is completely unacceptable.
Yes, it is unacceptable. However, it is not due to the number of kids in class. Back in the day, I had a class of 34 first graders. While I think that is unacceptable to have that many, you don't lose kids. Even when there are a lot of them. Someone was not doing their job--or several someones.
On the other hand, I don't think I would expect this to happen at this time of year. Certainly, at the beginning of the year, kids may try to leave (I never had one that did), but this is odd.