Just guesting in here so please excuse the intrusion - but I am astonished by what I read. I've been out of GA for many many years so I don't have my finger on the pulse, but this interpretation of rule 5 thing sounds like an utter, crass failure of common sense. Is it a new JAR thing? I remember regularly doing PFLs for my PPL - and subsequently needing those skills in 'anger' further down the road (albeit not in a GA aircraft).
If the CAA decided to prosecute for an EFATO (sim) then, as has been said, things would get 'uncomfortable' for the CAA.
Yours in astonished dis-wonderment,
MT