We came across a minor issue that can cause confusion in the People block. We thought we should list it in case someone else comes across it too.
The thing is this: If your list of students is longer than the number (say 20) set per page (say 21), the People block shows an alphabetical search (for first name and surname). If the list is shorter than or equal to the set number (20 or less), the search option does not show.
If it now happens that in a course with 21 students, you have searched for all students whose name starts with "S" (it shows you this list), but if in the meantime you reduce the number of students in the course to 20. The search option is no longer visible and you see only those students you searched for. There seems to be no way to get the full list back (especially, if you are unaware someone removed students from the course).
I know it is a rare occurence, but it happened to us. The solution is to increase the number of students again to more than 20 (e.g. enroll a fake student) and return the view to All students, before reducing the number of students to 20 or less.
Hoping to have helped someone by sharing this...