I have noticed that when doing simulator checks for work, often the other pilot doesn't want to declare a MAYDAY, even for an engine failure. I've also heard "well its not on fire so I think a PAN is sufficient".
Whereas I would say, bugger that, I'm calling a MAYDAY. Why not?
Even when I call a MAYDAY for an engine failure (in the sim) I sometimes get the other pilot saying "well we can downgrade it to a PAN". Why? Surely an engine failure is pretty serious!!! Why NOT call a MAYDAY???
PAN is not always recognised abroad, and although I would use it in the UK in certain circumstances, perhaps if engine was running not quite right, but was still running, and not causing a problem with the flight path. But if I had any doubt I would just call a mayday.