However - the danger is a simulated engine failure after take off - in other words low altitude. When the instructor closes the throttle against the aft stop it not only simulates a windmilling condition but it is actually windmilling and that means lots of drag.
If the student faffs around going through all the "mixture up - pitch up - power up etc drills he must remember the windmilling prop ensures the aircraft will not only lose speed rapidly but also go downhill.
This is a very very good reason not to be too enthusiastic in conducting such training too close to the ground. My personal minimum is 300 ft AGL.
Sure engine can quite at any time and altitude, but there's no need to be silly and practice at stupidly low altitudes when someone is learning the ropes or carrying out recurrency training. If the student can get it right at a safe altitude then its reasonable to assume they will get it right down low if or when that ever happens.