It's a bit of a dirty secret really - most people who teach self defence classes know that what they're teaching will be mostly ineffective due to:
- the deer-in-the-headlights syndrome that you mentioned
- 99% of those students are not going to actively practice what they were just taught therefore if they ever manage to apply it effectively it will be pure luck
Some schools/people will use this knowledge simply to make profit, the others will still teach the courses because they know that even one person "saved" is better than nothing at all.
In my experience the only way to overcome that situational paralysis is to train. Then train some more. Then practice the techniques on an unyielding opponent. Then train some more. It's a psychological reaction (also here), the only way to beat it is to understand it and train it out.
Situational paralysis is common, especially in lower ranked or beginner students. Another manifestation of it is situational panic - where the student just panics and strikes out like a crazy person, not really sure what they're doing. Afterwards they have no real memory of what they did.
The only way to get rid of either behavior is to train to the point that you don't need to consciously remember the technique, and to actually experience having to use the techniques. When you train be aware that you're not just training the body, you are also training the mind and eliminating the negative responses. As you execute the techniques you need to be visualizing exactly what you are doing with it; after a while this visualization will become an automatic habit and you won't have to do it deliberately.