You can give a sub domain any name that you want.
I doubt very seriously Google would index a sub domain with no description and tags on it especially a new site. We've got a large corporate site in the making now and have been working on it for 6 months. I just did a Google, Bing and Yahoo on it and is no where to be found. We also never tell a client their site is up on a test site either.
You can do a Whois on any of our sites, including our personal and business sites and it'll tell you it has Whois Guard on it and you have to contact them to contact us. The m3 test site is one we use for short term and you can see a subdomain on it. I think it's still in a post I made on this forum several months ago.
http://rails.m3sitetest.comI've left it up because it belongs to my best friend in Moscow and it has a very pretty photo of St.Basil's Cathedral for anyone to download if they wish to do so.
I've also been asked to add more photos of Russia on it but I haven't had the time.
How we charge a client differs from one client to the next but we never start a new site without a down payment with final payment upon completion and approval of the site. After the final payment is made then we upload the site to their hosting company. We also do contracts so everyone will know and understand "who what where and when".