But you do have a point that you do get PPL FI's.
Still think its against the spirit of the legislation and they would take a dim view of it.
I think you've just made my case rather nicely.
If a PPL can legally give flight instruction, provided she is not paid for it, why shouldn't she give a check-out on the same basis?
The cost-sharing exemption that you quote is not really relevant, in that it permits a payment from passengers to P1 in particular circumstances. In this case, there is no such payment requiring an exemption.
The law in this area is far from cut and dried and I'm not just trying to be pedantic. It's just that there are so many things that we
can't do that it's a pity to add to the list unnecessarily.