What, pray tell, would be your solution to a simulated engine emergency over 8/8ths cloud in a fast and pointy airframe?
I think the point is not how to deal with the simulated engine emergency, but rather whether to simulate at all, in an unknown traffic environment under such circumstances.
As to what your options are to be able to train for such an emergency, I'll again draw you back to MC's earlier posting :
What would be sensible is to think about the risk before you do something. If you want to do your 4000fpm descents in Class G and there's cloud in the way and your primary radar is inop and the use of transponders is not mandatory in the airspace and it's not CAS then you have a few choices.
1. Go ahead and do it anyway
2. Defer doing it until you have serviceable primary radar
3. Defer doing it until you have good vis and can achieve separation by visual means.
4. Stick someone outside the tower with a pair of binoculars to watch out for traffic underneath the clouds and make sure it's all clear before initiating the descent.
I'd add
5. Go and do it somewhere else, where there is a known traffic environment.
dp