I refer you to Chapter 2, page 2, para 5 of CAP 774 (see, I have read it ! )
"However,if a controller/FISO considers that a definite risk of collision exists, a warning may be issued to the pilot". So, has he still failed ?
I refer the honourable gentleman to the last paragraph in my previous reply.
Your example has an infinite number of conotations. Two C152's, you can just about let the blips merge. Two restored Jet Provosts and you might be thinking about definite collision risk with about 10 miles between them.
Your imaginary student needs to be a little more flexible - that's what's wrong with the 'product' from the college these days, they think that one solution fits all.