There is nothing wrong with an instructor telling someone to log PIC when they are onboard. As long as the flight isn't going to be recorded for any offical reason.
When the local PPL's who where on the build for hours needed a school check ride I used to let them log PIC and didn't log anything myself. I know i could have demanded to log it but as most of the trip was spent by me looking for dolphins its only fair.
MJ