Although i'm not an instructor there are a few points here i think are worth talking about-
Blade washout - You must have let go of the throttle or not held it firmly enough for the Governor to take over. Don't freeze on it but hold the throttle firmly and you can over power the governor. The good point about leaving it switched on is that if it all goes bad (hopefully not in a hovering auto, but a good habit for Auto practice for later) then all you have to do to get engine RPM back is let go the throttle (but watch for the overspeed) and the machine does make life easier. As long as your Rotor RPM is above 80%.
Whirlybird-
If you turn the governor off, the correlator will still increase the rpm if you raise the lever that much. In fact, I think it will do it more, since the correlator over-compensates if the lever is below 18 inches of manifold pressure.
The correlator is mechanical. It is the coning of the blades that causes the overspeed just like an ice skater tucking themselves in to spin faster.
certainly not yank it up enough for the governor to kick in. That's my experience anyway.
The Governor wont 'Kick in' from yanking the collective its driven by the rotor RPM.
Johe 02-
I think it's extremely unlikely a lycoming piston engine will loose all power in the blink of an eye. Much more likely to lose a mag or drop a valve, splutter and cough and quit slowly.
Run a machine on a pad and turn the fuel off then come back and tell us all the results. They dont cough hey! Some other ideas for it justto stop are besides fuel starvation, Water in the fuel or a simple blokage, an oil line breaking leading to engine siezure...
Well i've got to go What do you think