Actually the answer to my question is in the report but it still raises questions about what was being taught in the sim and on line.
The common practice of flight crews to prevent an overspeed was not a documented Qantas or Boeing procedure. As a result, the potential consequence of this practice was not considered when the autopilot was modified.
Which suggests that the training does not reflect what is written in the manuals:
Qantas advised the ATSB that it was common practice for its B737 flight crews to manage an impending overspeed by applying control column force to override the autopilot. The expected outcome of this action was for the autopilot to revert to ‘control wheel steering-pitch’ (CWS-P)5
mode, and raise the aircraft’s nose. According to VZZ’s first officer, the technique was part of initial B737 type rating training and line training. The captain also confirmed that this technique was commonly practiced.
So the question then is why did 737 fleet management allow for the training of and the common practice of a technique that was not a documented Qantas or Boeing procedure?