Once upon a time, 'practice' engine failure meant that the engine was shut down. If it was retarded to idle, that was known as a 'simulated' engine failure.
EFATO was certainly NEVER practised in the Gnat on my course. It wouldn't have been a question of just flying the jet; an engine failure would also require completion of the STUPRECC drill and continuing in 'manual'. For those who may not know, that would have been very difficult and highly unlikely to lead to anything except an ejection.