C/S
I agree with you overall. While it is clear from the report that thrust was probably set. The fact is that neither pilot indicated they knew what thrust was set. The PF had no idea what was going on and the PNF (and training captain) called it as not being set. Smart move would be to pull it up from low speed. I don't agree with your go call at all "in this case".
There is lots not to like about this incident, most of which has been covered above. Another thing to look at is the role of the training captain. A simple advice to bring the lever back to the detent would have fixed this from the second the FMA came up . Thats what training people would normally do.........! There were passengers on this aircraft. The concept of lets see if he works it out is probably not a great one.