Fly: confidence in the engine keeping going over those houses!
If a pupil pilot or any pilot for that matter can fly a climbing turn at 501' he or she can do the same at 200'. I think I am objecting to the implied rigidity of your 'rules'. We're trying to produce pilots who can exercise judgement and be confident in their skills and it's clear that some instructors have a confidence issue themselves (cf reluctance to spin) or dwell on the dangers of flying beyond a healthy respect that can only communicate itself to the student perhaps to the detriment of his or her performance....
finally, some of us have always said "final" and the majority of instructors here don't teach 'crab method'.
The End.