I know the original question came from Auz but most of the replies are from the UK
AMC-FCL1.380 includes the JAA ME CRI syllabus. Under the heading Minimum Control Speeds it states:
NOTE: This exercise is concerned with the ultimate boundaries of controllability in various conditions that a student can reach in a steady asymmetric power state, approached by a gradual speed reduction. Sudden and complete failure should not be given at the Flight Manual Vmca. The purpose of the exercise is to continue the gradual introduction of a student to control an aeroplane in asymmetric power flight during extreme critical conditions. It is not a demonstration of Vmca.
The purpose of the exercise is to demonstrate that the aircraft is more controllable with the failed engine simulated feathered, and with 5 degrees of bank towards the live engine. in other words to equip the student with sufficient knowledge to be able to deal with the worst case.
The Instructor should fly the aeroplane, whilst the student experiences the differences in rudder force under each condition.