That sounds a little complicated. If you're 2000 feet over your landing spot in real life, you'll just spiral and land.
I always taught it in progressive steps, and mostly off-airport, without landings so there's no fees and no traffic. First step is a demo on one of the first lessons: yes the airplane will fly if you trim for Vg. I've even done it on "discovery flights" for those prospective students who pop the "what happens if that big fan out front stops turning?" question.
I always include it as an element in the ground reference maneuvers. You're teaching them to judge the effects of the wind and fly the airplane to compensate. They should be able to do it even if the prop is at idle. And that last 1000 feet between the airplane and the terrain is what counts. Anything higher, and you're really working on "picking a suitable spot" and procedures with no time pressure, not dead-stick landing.
That way, nobody is surprised when you pull the throttle back in the pattern. Should always be a normal downwind altitude and distance from the field. Have them shorten the leg and fly a normal base profile, just a little bit closer in. How much do you shorten? Depends on the wind. Tailwind or a xwind blowing you away from the field, shorten a lot.
The only ones I ever try and teach "turn-in abeam your spot" are the CP students, as most training retracts begin sinking like rocks with the feet out and no power on. And face it, that's for checkride and spot landing purposes. Most of them would never make the runway at a normal pattern altitude and distance if you had an engine out on downwind.