Very sad news.
I don't buy some of the points made on here ref needing to look inside during teaching - is it not basic airmanship to ensure that you are clear of other aircaft before looking in or drawing your student's attention to something in the cockpit? If, as has been reported, the aeroplane crew knew that another aircraft was close, surely everything else (ie the teaching) stops until the threat has been identified and the conflict resolved?
And why would the aeroplane continue descending, given the known blind spot ahead and below, rather than climbing or turning into an area which they could see was definitely clear?