That's an interesting aspect actually. Yes, as a (wannabee)pilot you should be aware of the regs and comply with them but during a PFL exercise I feel that it is the job of the instructor or examiner to make sure that a go around is initiated before busting the altitude limits as at that point the person flying should be fully focused on carrying out that PFL. But it can get interesting sometimes, and in my view should have been covered in a briefing. It would also allow for the possibility of the examiner extending the exercise a bit if he would need to see a bit more to come to a decision on signing off on it.
I am an ATPL holder and in the UK rule 5 did not include a hard deck of 500' agl unless landing or taking off, only a sphere around the aircraft which the pilot can not intentionally fly near any person, vessel, vehicle or structure, at the time ( I say intentionally because there was a court case where some bird spotters who were camo'd up tried to get a pilot done and the judge ruled against them saying if the pilot couldn't see them how could they be expected to avoid them to comply with rule 5). It may have changed now. NO rules of the air were busted during my PFL. BTW I have 1000 hours PPL instructing before I went on to fly airliners. I always taught down to ground rush height knocking it off at 500ft misses a good 50% of the experience value, pointless doing a lovely approach and then entering unknown and unexperienced territory in the last 500ft. That's my view but I am sure other will disagree. BTW 2 of my ppl's have done a forced landing, both cases the plane was flown out the field afterwards after fixing the problem. Only managed to speak to one of them who said it was just like when I was with you apart from the last second when the wheels touched down which I must admit gave me no small amount of job satisfaction.