For the love of God man,! you're at 2.5 miles approx VMC, what do you think is the safe course of action? The critera is you must be stable by 500 or execute a missed approach, is the 30 seconds you have between 700 and 500 feet really going to give you time to change the config and reset the Vref and stabilise the approach?
That's a bit too black and white for me. Unless you know exactly why the engine has stopped, you'd be a brave man to, in all cases, go round just because you might need to make one flap selection and bug up a tad. After all, you should be ready for exactly that on all approaches. If you are already stable at 700ft, it is highly unlikely that you will become so unstable that you're going to prang. I had a situation in the SIM some time ago with a cabin fire which required an immediate reland. The FO turned base too early and we were high. He started mumbling about high sink rates - I said stuff the nose down, we're landing! No problems. The rules are for the guidance of wise men, and the blind obedience of fools. That said, have a good excuse.