I would say it is permissible per Section 1004.5.1. As long as they design the means of egress system to accommodate the increased occupant load, and that "all other requirements of the code are met based on such modified number." Thus, by increasing the occupant load, they must comply with Group A occupancy requirements.
Occupancy group classification sorts various building uses based on relative hazard, such as fire load, occupant load, and familiarity with one's surroundings. Allowing small assembly uses to be classified as part of the main occupancy or another occupancy, or as an accessory occupancy, is a compromise that allows these limited but more hazardous uses without requiring compliance with the added restrictions that would accompany them.
Think about it: is five 500 sq. ft. dance studios (10 occupants) more or less hazardous than one 2,500 sq. ft. dance studio (50 occupants)? In my opinion, they are still equal because
- the fire load is equivalent (although there is some physical separation that somewhat restricts the spread of fire when five studios are used);
- the combined occupant load does not change; and,
- the occupants are equally unfamiliar with their surroundings.
Also, there is no occupant load for dance floors in Table 1004.5. Is the occupant load factor for "Exercise rooms" too much, too little, or just right? (Per the Center for Educator Development in Fine Arts [CEDFA], a dance studio size must be able to accommodate 100 square feet per student. So, probably too little.)
In many cases, designers want to avoid Group A occupancies because of the added requirements that come with that classification, especially area and height limitations. Since the code allows an unlimited area Group A building, what is the objection if a designer wants to use 15 sq. ft. per occupant for a dance studio? They may never see that occupant load, but the building is designed to accommodate it, and the level of hazard is neither increased nor decreased because of it.