The exams and tests I passed in 1976 to do my fixed-wing instructor rating and again in 1980 for the rotary-wing rating were pretty darn comprehensive.
No multi-guess questions, it was all written answers, so you had to know your stuff, not "pluck it out of your @rse".
I have interviewed applicants for instructional jobs in the 90s, and it saddened me that some of them had never learned the material, they had answered from copied answer sheets from their "school". No depth of knowledge, it was more "Ah, the question about inflow roll, the answer is C". One had even simply paid the cost of the course, flown half the hours, and never finished the PMI section, and was given a PASS by the school at Bankstown.
Never had the joy of dealing with Grade 3's, and if Dickchair is an example of the applicants, I am glad to be out of it.