I can't help feel that there's a lot of "it depends" here.
I've had the ignition turned off on me by an instructor in a microlight at about 1000 ft - overhead a 4 mile x 1 mile landable beach. It was an enjoyable exercise.
I can't say I'd be particularly worried at an instructor turning the engine off in a motor glider - such as a Grob 109b, at 2000ft most places. Many people will do that themselves, because it is both "motor" and "glider".
I would be somewhat disturbed at somebody turning the mixture to ICO on me in an Arrow at 2000ft overhead a narrow short runway. If I was in, say, a Pegasus XL-R I'd be altogether more relaxed about it.
Also at 2000ft perhaps the correct thing to do is to re-start the engine, and the instructor was expecting that and just assuming that if there was a failure to re-start, then HE would land on the airfield? With that much height, I'd certainly expect if I was the checkee to be attempting a re-start (or at-least touch drills), and as an instructor I'd expect them to do that.
I'm not sure if they still do, but microlight flying competitions used to routinely include spot landings from an engine stop at (1000ft?) in the overhead.
It all depends !
G