Then the question "is it dropped completely & you have 3 attempts again" Yes, you would otherwise not be able to do your PPL training over more than 18months. If you failed an exam twice, passed third attempt, once it became out of date you would be permanently grounded. Not the case. You have 3 attempts to pass then there has to be a delay before the next 3 attempts. How long that delay is I don't know, but I don't think you are grounded for ever. I think it is because there are only 3 different sets of papers per exam & having been briefed on which Qs you failed on you would have an advantage of knowing at least some of the answers to a recent attempt. Though I may be wrong.
Perhaps an expert will clarify??