At the airfield I did my training, an instructor does get paid while
sending off a student PPL on a solo flight.
Such a flight is done on the instructor's license/insurance. So the
hourly rate the student pays is the same as if the instructor was on
board.
One instructor told me once how he made £200 on one particular
(unusual) day when he sent several students on solo flights, without
him doing any flying at all.
But I agree that instructors tend to err on the side of caution -
usually to an extent which would make any outsider wonder what
possible use a PPL is going to be... more than 3 clouds in the sky and
you can't fly...