QUOTE.....in real life, what would you do if an engine failed (and you know this because of the yaw and loss of performance) and even though there is no vibration N1 & N2 have gone to zero over a short time interval? Would you really go “oh yes, definitely fine, let’s start it back up later”? I think I’d be checking under the wing to see how much of it was left...[/QUOTE]
Precisely! Pod mounted engines have been known to completely depart the wing. That would certainly cause the N1 & N2 gauges to be somewhat confused. Of course in the real machine there would be all sorts of other unpleasant cues, but older simulators will lack these. The OP mentions this was a B737 Classic sim, so it would not be 'state of the art'.
Centaurus/Sheppey may have been exposed to so much simulator he is only looking at it from the perspective of an instructor panel with a limited portfolio of failure modes. That's for the instructor to work around, not the candidate. Neither should the candidate be expected to read the instructor's mind to determine what is required; however it is certainly part of the instructor's job to look at what cues are being presented in the candidate's seat, and whether the actions taken are reasonable - not what buttons have been pressed on the IOS !
When doubt exists, a pilot under check should never be pinged for doing a worst case checklist.
Save the cheaper options for discussion during line checks.