There are many people who are utterly unsuited to being in a cockpit. Hopeless cases are a reality of flight training.
However, you have to be careful that it isn't just a relationship problem between the FI and the student.
In this case, I'd be talking to the CFI, let them fly with the student to ascertain what's going on. Then as as CFI I'd have handed the student to someone else who may be more suitable.
If this still doesn't work, then you should talk to the student about it. FInd out what and why they are struggling. The worst students for this are the inconsistent ones. One day they are fine and you think "great, we've cracked it!" and the next flight they seem unable to even work out how to open the door.
In one case. I took a student aside and had a full and frank discussion about it. I didn't want to waste his time and money, but he was determined to prove me wrong and wanted to continue no matter what.
For me that resolved the matter. He never got a licence, but we did manage to get him off solo and that was good enough for him. He knew the options and our opinions and no-one was pulling the wool over his eyes. It was his choice to continue.
If someone wants to go flying and knows that they may never get a licence, but continues anyway, then it is our duty to support them as much as we can. You never know, we do get it wrong and they may surprise you.
In fact my best moments as an FI have come from seeing students who initially you thought were hopeless becoming safe and competent pilots and gaining a licence.
Far better than just flying with bright young things who zip through in minimum hours with no real effort or input from the FI.