The simulator instructor gives him a FAIL because in the instructors opinion the pilot should have gone around again because he was too high to be stable by 500 ft.
The right decision IMHO.
The approach was not stable at 500' HAT (VMC)
The landing was not made within the touchdown zone
No comfort should be taken from the fact that landing worked out "OK" in the simulator. Landing over runs have been a major cause of aeroplane accidents/incidents in recent years. QF 01 Bangkok, AF 358 Toronto, AIX 812 Mangalore, AA 331 Jamaica Bay, all spring to mind.
Speculating now but, you don't mention whether this was a multi-crew operation and whether the PM had anything to say. I mention this because "if" it was a multi-crew flight, and "if" the PM was calling "high" or "all whites" or "Go Around" and the candidate continued then this would raise further question about the candidates judgement.