I am going to break this response into three parts:
Is using the back button non intuitive to the user ?
I would disagree with this. The back button is one of the most commonly used elements in the web browser and users know how to use it and finding that it doesnt work can actually be a really frustrating experience as they will have to initiate the process again or worse loose all the data which has already been filled in.
To quote this article from smashing magazine :
Keep the ‘Back’ button fully functional
The back button is one of the most used buttons in a web browser, so you can be sure some >people
are going to employ it during the checkout process on your site. Some
sites disable the functionality of the Back button through automatic
redirects or error messages, which is sure to negatively effect the
visitor’s experience.
Not only should the back button lead to the previous page without
encountering any errors, you should also save the user’s data so that
it is displayed again if it’s a form. This allows people to make
adjustments and carry on without having to re-fill the whole form.
Yes, sometimes it’s too late to go back, like after clicking that last
‘Complete order’ button, but by ensuring that all the other pages get
along with the Back button you can deliver a better user experience to
your customers by saving them time and frustration.
Should the navigation bar be hidden ?
It depends. If the site design is such that the navigation bar will enable the user to perform the checkout more effectively then it should be available or atleast a subset of the navigation bar should be available which could potentially help him. However the thing to note is that a checkout process must be linear and any steps which take the user of the checkout process to completely different page break the flow and cause the user to lose focus.
Hence it is of paramount importance to keep the visual clutter in the page to a minimum as greenforest rightly pointed out. To quote the above referenced smashing magazine article again:
The checkout process is different to the rest of the browsing
experience on your site. During this process your customers aren’t
shopping — they’re making the purchase. This means all the browsing
controls are redundant here and would only distract your customers
from the task at hand. Eliminate these unnecessary elements — e.g.
product category links, top products, latest offers, and so on — to
keep the interface simple.
Provide a “return to shopping” link in case the customer wants to go
back and buy something else. Additionally, ensure all the buttons that
point to the next step in the process are large and prominent so
they’re not missed.
Also another key thing which is called out in the same article is the importance of not taking the person out of the checkout process. To quote the same article again:
Don’t take the user out of the checkout process
It’s essential that
the checkout process isn’t disrupted, for example, but taking the
customer to a different page. Taking the user out of the process can
cause two problems: 1) they might get confused about where they are
and even lose the checkout page by closing the tab or window. 2) they
may get distracted and fail to complete the process.
To remedy this, we really need to find a way to show all of the
necessary information on the checkout pages themselves. If you need to
provide some help or information that doesn’t fit on the current page,
use floating windows or, as a last resort, a pop-up window to display
this. This allows you to present new material to the user without
taking them out of the checkout process.
Here are some examples of sites which show a subset of the navigation to the user during the checkout process to ensure he has a point of reference at any time



Is this bad usability ?
I would say Yes and No
No,because you are making it easier for the user to focus on the end process of checkout and removing potential distractions which might prevent the conversion
Yes, because you are restricting the control of the user in doing what he wants to do (note some sites avoid this by providing a back to shopping option) as shown below
