I'm not sure where you get the live engine wasn't developing full power, but it's fair to say if you knew you were going Vmca, pulling the live engine back would be the correct course of action on the part of the flying pilot
This bit:
It was also identified that normal power on both engines was not restored when the expected single engine performance and target airspeed were not attained. That was probably because the degraded aircraft performance, or the associated risk, were not recognised by the pilots occupying the control seats. Consequently, about 40 seconds after initiation of the simulated engine failure, the aircraft experienced an asymmetric loss of control.
If you knew you were going Vmca then re-applying power on the "failed" engine would also be a good idea. just as it would have been a good idea with the Embraer in Darwin and even the 707 off East Sale. Maybe part of any EFATO briefing in a simulated exercise such as this one should include at what point the exercise will be discontinued but I think there is an element of press on-itis in order to tick a certain box. As for the exercise starting at 400' I don't think that is unusual at all. When I started conducting assymetric training in light twins my boss insisted that the exercise not be done below 400' as he had too many bad experiences with pilots he thought knew what they were doing.