Like Big Pistons, I don't think all partial failure should be handled the same as a complete failure. I think partial failures have two divisions: CAN maintain altitude, and CAN'T maintain altitude.
And of course, is it looking like it will keep running, or are things deteriorating?
Are you going to teach every single failure mode in the air, or are some things going to have to be discussed on the ground only?
I've had a low oil pressure/high temperature scenario in IMC , after several times round the hold, where I simply let the student fly the published approach. We broke cloud at 900 feet and went ahead and landed. That was a mangled piston, funnily enough the engine didn't sound rough. Needed a new one, though.
I've had a throttle jam solid at 1800 rpm after reducing power to avoid being sucked into cloud in the cub, just after an engine change. That one was easy, take it home.
Third one was both plugs failed on the same cylinder on a Pa 28, which was boneshakingly rough but would even climb a little. That one we got home too, flying from just possible field to just possible field (Herefordshire, after two weeks solid rain)
But the OP (welcome back GTE) spoke of EFATO. That one is where I say to my students that at this point the aircraft is now the property of the insurance company. Fly it down to the ground, try to crash gently.