I would agree that it would be a rather unpleasant experience to sign off a logbook only to find that Bloggs pranged an aircraft and your name is the last FI that he flew with. Sadly the 1 hour flight is a brief snapshot of that person's flying and during that hour the standard could well be different than his/her usual flying standard. From a personal point of view I would deem a flight satisfactory if I would be happy to let a family member of mine, fly with that PPL holder. If I had any doubt whatsoever then a quiet word in a briefing room might be in order or even referring the matter to the CFI or a more experienced instructor. You have to allow for a certain margin for a drop in flying standard since a PPL will probably fly differently if they are on their own as opposed to having a FI or especially a FE sitting beside them. I would be looking for a slightly higher standard than normal, which would take into account any decay in standard before their next flight with a FI or FE.
I have recently joined the FI world and I have a PPL ‘refresher trip’ in the next few weeks and I am personally quite looking forward to see what the general standard is. I recently flew with a person who flew in the US and recently passed her PPL Skill Test and decided to fly at my local flying club. A few trips were needed until she was up to the required standard and that was just after PPL Skill Test. Don’t be afraid to not sign a logbook, if required!