Night or IMC don't preclude asymmetric training. I have done it where it was considered acceptable. The key was to increase safety margins according to risk. E.g. No EF below MSA in some cases.
By day or night, it is unacceptable to leave the student or candidate in control if things don't go to plan. Aircraft doesn't climb? Take control. Drills incorrect? Take control. Many of the accidents listed here occurred after the student made errors. Continuing in order to 'prove a point' is high risk but is associated with inexperienced instructors.