To be absolutely clear the Mentee will be PIC at all times, and that will be part of the contract between the Mentor and Mentee.
Clearly the Mentor is not going to sacrifice his or her life to uphold this principle, so we can see that circumstances could arise (incipient spin on turn to final for example) where the Mentor might decide that life or limb are at stake and take direct remedial action, but the PIC is a qualified pilot and, except in exceptional and hopefully very rare circumstances, the Mentor is only there to give helpful nudges to give the Mentee confidence to spread wings.
There may be wrinkles around the question of the value placed on the Mentor's advice, but the Mentee will have to take responsibility for accepting or rejecting that advice. As Bose says, we envisage that most of the advice will be related to procedural matters, such as how to do an FPL or how to read NOTAMs, rather than acute safety concerns.
If there are concerns about the Mentee's ability and safety, the Mentor's guidance will be to terminate the mentoring and suggest that the Mentee turns to an instructor. (Incidentally this is one reason the schools should not feel threatened by the scheme; the hope is that we will identify people who really need a brush up and push them towards professional instruction. I have done that many times when I have mentored informally. Xwind landings seem to be the biggest bugbear, but just being able to approach reliably at approach speed is an all too rare art.)
We can do this relationship to death, but we will only really know with experience. If once the scheme starts, participants report back horror stories we will have to change guidance to match, but hey guys! Let's try and get it going without the prophets of doom trying to wreck yet another initiative to reinvigorate flying!