What utter nonsense. If you are an instructor flying with another pilot in any form of check out it is countable as Instruction. JAR-FCL 1080 (c) (iii)
If the checkout is acceptable you can sign their log as PIC U/S for: Any form of flight test other than for the grant, renewal or extension of ann aircraft rating Ref: CAP 53 Part 1 App G Case J. JAR-FCL 1080(c)(ii) uses the term SPIC.