Some students, stop hearing the instructor when they feel highly stressed.
You can yell at them and they will not hear you as they become so focused on what they are seeing and feeling and stop hearing altogether.
In an incident similar to the one being discussed, a student could claim (and believe it sincerely) that you never told them to release the controls.
I have also had students confirm handing over to me yet are still quite forcefully on the controls (they are basically holding on to whatever is in their grasp or I suspect used to pushing on a car brake pedal when under stress).
In this case, in a similar incident a student could claim (and believe it sincerely) that they did not have the controls and the the outcome was solely the result of the instructor's actions, not theirs.
I know SOAR is defunct so have no idea who is being held liable, if it is the instructor, I think there are surely grounds for appeal as how can it be positively determined that the instructor didn't demand control and it is not unknown for a student to have disobeyed (even if unintentionally) the instructor's commands, in a high stress situation?