I thought the industry learnt many years ago to keep engine failures in the sim wherever possible.
In principle, yes, but................
Depends what type you are on, and on the sim approval level. Decades ago I was a B737-200 TIRE, and we had to do all the engine-out exercises on the aircraft, simply because the available sims were not approved for testing those items - though of course we did use the sim to train thoroughly.
In this case, the airline may well have been in the same situation.
On the later sims for the 757/767 we had those approvals.