putting myself in the CPL candidates shoes for a moment.
If an ATO does conduct a EFATO simulation at low altitude in conditions similar to the report. wouldn't the best course of action be for the candidate to abort the test apply full power and climb out?
First and foremost the pilot is responsible for the safety of the aircraft and the occupants of the aircraft, so you would assume that the CPL candidate would have applied power and aborted the EFATO.
But, that been said, realistically, the student would not have had the experience to recognise this as a dangerous situation. Putting myself in the students shoes I would have accepted that the ATO would not intentionally do something like this unless they thought it was . My thoughts would have been I'm sitting next to a testing officer, this guy/gal must have a heap of experience etc etc and would not have second guessed their call.
You would be hard pressed to find any young student pilot (young in experience, not age) who would be willing to countermand an action or request/order from an ATO for fear of failing the test flight.