A turn back may not have been the intention in this particular instance, regardless of what was briefed prior to flight, but could have looked like it from the ground. without a CVR impossible to say.
I think you hit the nail on the head. In the Tiger Moth at 58 knots climb speed, an instant throttle closure will produce a dramatic loss of airspeed unless you immediately stuff the nose down well below the horizon. That, coupled with an aircraft well known for its strong yawing tendency unless kept in perfect balanced flight, would make it easy to enter an incipient spin (already yawing when throttle closed and high angle of attack adds up to potential danger of incipient spin).
The Winjeel accident at Point Cook as described earlier was a similar event. At the Court of Inquiry we could never prove that the intention was a turn back or whether in fact the student attempted a turn through 90 degrees (approx) to aim at a nearby beach. We did know from witness statements that the initial turn after the instructor had called he was doing a simulated engine failure, was made quite nose high and the aircraft went into the incipient spin from that position.
Some years ago I learned that a senior pilot of the RFDS and in charge of endorsements to the PC12 was reaching turn banks on the PC12. Turned out he was a former RAAF instructor. The theory was the PC12 had excellent gliding characteristics with its prop feathered and that it could safely do a turn back after take off once a certain minimum height was reached.
I know little of the PC 12 but shook my head in disbelief that after accidents that had ocurred over the years with pilots practicing turn backs and getting killed, the lessons of the past were being ignored. I dropped a line to CASA who never even bothered to reply. Ops normal....