Surely this flight is,as the LASORS Sect F says, "a training flight to ascertain the skills and knowledge of the applicant". It is not unreasonable to ask about the technical aspects of any aircraft used and also ask for the aircraft docs and a load and balance calculation, particularly if the type is unfamiliar to the instructor.
My normal approach is always to ask if a pilot is in the last year of the two year validity period ,if someone joins our club and needs a checkout. You would be suprised how many pilots still don't understand the JAR system. I conduct several flights for non club members in a whole variety of aircraft, very much as the guest of the owner, albeit as P1.
Re the 1 hour dual flight,I would ask what their flying experience is and what they would find useful during the one hour flight. This is often one of the usual supects such as stall, incipient spin and PFL's etc. A lot of PPL's are reluctant to try these Ex's solo, so this is the only practice they will have in a two year period. The other topic is often "how the avionics work". It is much easier to talk through avionics with an instructor and learn to be confident in their use , than admitting to other pilots that they only know how to switch the box on, and rely on their GPS. (This scenario is often post PPL and moving on to a more advanced aircraft.)
Re the above , the instructor can always decline a flight if he/she thinks an important training item will be missed. Also after the flight the instructor can refuse to sign of any 1hr dual if he/she isn't satisfied with the standard of flying