I teach a full electrical failure at night by switching off the master.
There is no requirement for the grant of a night qualification to either demonstrate flight with the aircraft master switched off or for the student to be able to demonstrate that the aircraft can be flown with complete loss of electrics. If there is, then the FIE who removed by night instructor restriction has it all wrong.
During the nav exercise I simply give the student an indication of what annunicators would be displayed if the alternator packed up. If the student correctly states that he would load shed non essential electrics and land within 30 minutes, then I am satisfied that the student knows what she/he is doing.
Flying with the master switched off simply powers down the gyros, amongst other things, and would lead an inexperienced PPL into a spiral dive and an instructor with no instruments to recover. Lets hope its a moon lit night and visual references are sufficient to recover. Some parts of south east UK are nothing more than a black void with nothing to be seen for miles.
I do however pair it with some gen handling so they can use the torch to look at the instruments.
What instruments? The ones that aren't working properly because they are switched off.
Personally I think there are more useful things to teach ie. how to navigate and land at night which is actually on the syllabus.