The job of a talent agency is to sell talent. It is not an extraordinary thing for a print model to be asked to take off his shirt. An agency has to know what they are selling. If someone mumbles it is also not unusual for a talent agent to suggest they open their mouth a little wider when they speak. The goal is to help you increase your marketability. My experience of the Alvarado Rey Agency has always been that of professional behavior and people who genuinely care about getting people work. But if it appears that you are not marketable- yes, they will release you so you can perhaps find someone who thinks they can sell you.