You're talking about flyta, a ritual, poetic exchange of insults, and yes, they were common enough in Scandinavian culture to have been mentioned in a lot of sagas and in the edda (Lokasenna is just Loki murdering a dude and then going and insulting the Æsír, and Hárbarðsljóð is Óðinn insulting Þórr at a river crossing.) Oftentimes it would be a prelude to, or replacement for, physical combat (as in Beowulf, when Beowulf and Unferð get into their argument) so you would see two men insulting one another until they were ready to battle, or one left in shame.

There wouldn't have been a beat being dropped, because the form of the poetry didn't need one beyond the metre used; there is a pattern of stressed and unstressed syllables in Old Norse and Old English poetry that do lend themselves to musical accompaniment, but music isn't essential to the form.

As far as a mic drop is concerned, well, there wouldn't be one. You go until you're shamed out of the confrontation, or you decide to resolve it in combat.