M-ONGO
The thing is that this situation for some instructors arises very seldom. For me for example first time in 6 years.
So this is nothing that you have to teach people everyday.
For normal PPL teaching it is easy and I guess most of us know the rules. But for this specific seldom occurance for some it isnt equally easy to know all the rules.
The tricky rule is this one:
(iii) the holder of an instructor certificate may log as PIC all flight time during which he or she acts as an instructor in an aircraft;
It says for ALL flight time during when he or she acts as an instructor.
But what if the "student" needs to be the PIC for the flight because of not having full controls. Then this rule says ALL situations anyway. You have a situation if you strict follow the rules which ends up in both student and pilot logging PIC.