In JAA land, presumably other authorities would be similar, if you go-around once the failure occurs you are safely dealing with the issue and reducing the risk involved by getting away from mother earth. This would give you time to choose a suitable non-precision approach and position and brief appropriately. I would be very surprised if an examiner could fail a candidate for choosing the apparent safe option, I could be wrong and standby to be corrected.
Certainly on my OPC's if you are half scale or more on either LOC or GS then it's an immediate go-around. Therefore if either failed half-way down the approach I would treat this in the same manner. After all when the glideslope fails it defaults past half-scale deflection. I would therefore make the same correction as if I had drifted past half-scale by inaccurate flying. The result would of course be the same: go-around.
This hopefully will help, just my thoughts on the subject.
Good luck to the candidate in question.
H
PS: Vee, do I know them?
