I would want to know more information before I decided the students were cheating or not. The instructor refereed to an "exam room", and gave an hour range that the new exam could be taken. So the students are not all taking the exam at the same time, this makes it seem possible that the exam is online. If the exam is online, and the students can take it at home vs take it in a proctored room, that would change what would be cheating. If it were online at home (I don't think so from the video) then reviewing the test bank while taking the exam would be cheating. If not, then having seen a question before the exam may or may not be cheating, depending on HOW you saw the question.
If you did not acquire questions in an unethical way, then it's not cheating, it's just studying. As an instructor, I will sometimes put problems from the book onto my exam. If the students worked the problems before because they were studying hard, then good for them! I want my students to study, because it will help them learn. I also provide a sample exam with previous exam questions on it; I write most of my own questions and it's important for students to get used to my style. As a student, I had to take a written exam for my PhD. When I was studying for the exam I asked Professors for help, one of my Professors gave me some of his questions. I worked out every single question. He also submitted one of his existing questions to the exam and I recognized it when I was taking the exam. Cheating? No. I just got lucky (and worked my ass off).
If test questions are acquired by malicious means, or knowing that they are going to be on the exam, or are the test bank that is going to be used to make the exam. Then it is cheating. So if students knew that the questions came from a test bank, and downloaded the test bank (I'm sure it's on the web somewhere) to gain an advantage they cheated.
Finally, as an instructor. Writing a decent exam is surprisingly hard. My goal with an exam is two-fold, figure out how well the class as a whole is doing, and separate the students into their grade groups. The ideal exam has some problems that even the D students can answer (to separate them from the F's) and some problems (usually just 1 problem) that are a stretch for the A students. And a mix of medium problems for everyone. If you have too many easy problems, the grades will creep up and you won't separate students. If you have too many hard problems, the grades will creep down and you won't separate students. Writing an exam from scratch is very time consuming. I use my private test bank, and try to add 1 or 2 new questions to the bank when I'm writing each exam. I can understand (but don't agree with) an instructor pulling entirely from an existing bank to write an exam.
I hope I don't come off as flippant, but you're shooting for a PhD, the most advanced degree you can hold (if I'm not mistaken); isn't "surprisingly hard" kind of the name of the game? I'm sure if you ask students, many of them would say taking the test is "surprisingly hard," are shortcuts justified for them too? I'm sure a building contractor will tell you keeping track of and in compliance with environmental and safety regulations is hard, but we expect them to do it nonetheless, because that's his/her job!
Ultimately, whichever method allows the instructor to most effectively perform his or her job is best, and maybe that's question banks. Cases like this one are notable because they call into question the stance that using banks is as effective/more efficient.
Good luck on your degree!
In terms of shortcuts, that would depend on what they were. Some are fine, others are not. E.g. 'borrowing' answers from other students on homework is a shortcut, but it's okay if the student understands the material in the end; cheating on an exam is not an okay shortcut.
"Surprisingly hard" is the name of the game. I mentioned that writing exams is hard to motivate why an instructor would use a test bank. At a research school (I'm at a research focused school), being an instructor is only a small part of a professors (or grad students) job. Using a test bank (from books/publishers or private ones) is considered to be fine, as it lets them focus more time on the things they "should" be doing. Many things that are considered okay in this context are abhorred in others, e.g. having grad students be primary instructors is okay here but would be taboo at a teaching focused school. Of course, most teaching focused schools don't have big grad programs.
Incidentally, I'm on track to graduate this year. I'm sending out academic job applications and I find myself more drawn to teaching schools than I thought I'd be.