Speaking as a student, the passenger thing sounds like it might be a nice touch if there was a stipulation that the sole passenger is a qualified PPL.
Time with my instructor is certainly at a premium (probably due to the shortage addressed elsewhere on this forum). I would think that, once a student reaches an appropriate stage in their training, it would be useful to have allowance for them to take a 'VFR safety pilot' and log some P1 time while their instructor is working with other students on a Pu/t basis. I wouldn't expect the other pilot to be actively teaching (as this is obviously an instructors job) but I am at a stage where it is a little too soon for solo out of the circuit, but I could be getting some good experience by just applying a small safety net.
However, just giving a student carte blanche to take up the non-qualified, general public sounds exceptionally dangerous and I am surprised it is allowed anywhere in the world.