I can only recall seeing this twice in my years of teaching -- and in both cases there was an underlying "handicap" that kept the student from forward progress after a certain point.
One student, who was very earnest and worked hard and listened to and loved jazz, just had some sort of weird time "impairment" -- almost like a learning disability -- he just never could lock in with an underlying pulse. We even had lessons where he'd barely touch the horn -- we'd just listen to music and clap on 2 and 4, or even just try to clap with a metronome on every ding-dang beat. Because he could never overcome this, he never could get past a certain point, even though he had developed a pretty good sound...
The other student was a junior in high school, had been playing tenor for 4 years, and had even taken private lessons for a part of that time -- and she NEVER used her tongue to start or articulate notes. Her tongue never touched the reed while she played -- she did EVERYTHING with a breath attack. It's beyond me how neither her previous teacher nor anyone in her school program corrected her and got her on the right track. They really did her a disservice...
She really wanted to play jazz, and I told her we'd have to sort of rebuild her approach and get her to start tonguing. She worked on it, but got frustrated over time and eventually bagged the lessons with me...
So: yeah, I've seen it, but there was always an underlying impediment that stopped the student's progress.