OK, the bare conductor will be carrying the current as you said, and basically be "live" to a grounded object, box, etc; or a person.
YES it is a saftey issue, yes, it is NOT NEC compliant, and yes you are 100% right saying 'no way'.
I have seen instances where EMT was used as the 'neutral' for a 30 amp, 120 volt circuit that consisted of ONE 'hot' conductor. Yes, it worked, but the setscrew couplings were not tightened properly and started arcing. It almost caused a fire, as the EMT was installed on a wall that had clothing racks mounted on it.
Some of the 'old timers' used to say "gyp the ground" when you had a 'open' neutral to restore the circuit; heck I saw BX armour that was 'live' arcing on suspended ceiling grid.
You're right; illegal, unsafe, and not to be done.