who were demanding deactivating the SA 227 SAS system, by pulling the Cb, and pulling the aircraft into a full stall
I have no specific background on the Merlin/Metro family so I can only make some general observations.
(a) generally SAS is there to fool the pilot into "seeing" a conventionally stable system when the aircraft wants to be longitudinally unstable
(b) with the SAS U/S or isolated, there is a real risk of stick force reversals at low speed high thrust combinations .. and this gets worse the slower and higher the power set
(c) think about it .. you start to go slower and the stick has to be PUSHED rather than PULLED to maintain that lower speed .. ie back to front .. recipe for near instant disaster if you don't know what you are doing
(d) generally there will be an AFM limitation with U/S SAS along the lines of a maximum thrust/power limit to keep this problem within controllable bounds
(e) if anyone intentionally disabled the SAS and then intentionally played with stalls and, perhaps, high power assisted recoveries .. then that would amount to something a little silly
(f) a letter from the TC holder absolutely prohibiting what (some) CASA FOIs were demanding. That's quite expected and comforting to know.
Examiners are not Gods. On occasion the pilot under test needs to establish some ground rules. The only occasions I exercised this was on GA IR renewals - "touch a throttle/mixture below <nominated height/speed> and I'll close both throttles and land straight ahead" - never put to the test on that one.