(i) When the pilot is the sole manipulator of the controls of an aircraft for which the pilot is rated,
There is your answer.....the rest of that sentence had an "or" in front of it.
Anytime your co-pilot is rated in the aircraft (meaning type rating in the FAA usage of Type Rating) and is the handling pilot.....that is PIC time. (under the FAA Rules)
A good Captain will allow the Co-Pilot fly as much as possible to facilitate the building of PIC Time for the less experienced Pilot.....if you want him/her to move ahead professionally.
We do have a responsibility as Professionals to mentor our subordinates do we not?