SASless,
I seem to recall that the required action was to contain the Nr, if airborne (by pulling collective pitch), then revert to manual GOV once under control, or IF ON THE GROUND, to completely close the thottles (past the stops, as N1 GOV failures do not respond to throttle). I don't see how the crew you describe could be construed as following "the checklist" (I always thought hovering was being airborne!). Either way, it is an immediate action that does not require reference to a checklist.
But hey, let's not let facts get in the way of a good story.......
PS. I think the training moved elsewhere for other reasons, actually!