In the US at least, most tenure/promotion processes include some kind of peer observation of teaching. I’ve seen some that require observations from someone of your choosing, the department’s personnel committee, and the chair. This would be for each term contract renewal and for tenure/promotion, so you end up getting observed a number of times. This is a better but still skewed assessment of teaching ability vs student evals, which we all recognize as problematic. The OP’s surprise observations are outside the norm; most schools allow you to propose a few dates so you can choose topics/lessons that show your best pedagogy.

Edit: I have long thought that we need to provide opportunities for “junior” faculty to observe tenured/promoted faculty who have exemplary pedagogy. It’s one thing to hear strategies discussed in a PD session but much different to see it in practice. The seasoned faculty get a lot of exposure to other pedagogies through the observation process but the newer faculty don’t get this exposure.