But if those hours under the hood are also following IFR then it can be logged IFR whilst practicing instrument flying - correct?
Provided that you hold an instrument rating and are flying in accordance with the instrument flight rules, yes.
Since a PPL Student is training for a VFR only qualification I cannot see that they should (or could) Log any of their training flights as IFR.
Since a PPL student does not hold an instrument rating they are not permitted to fly (as PIC) under IFR but I think the implication was that the instructors (who presumably did hold IRs) were logging IFR, not the students. However, given the fact that the PPL (other than Ex 19) should be taught under VFR, it would appear that the 'instructors' are not only fraudulently claiming flight time under IFR but are also ripping off their students. Still, there are unprincipled charlatans in every profession.
Then the law is an ass!
European law certainly is, and then the UK CAA start fiddling about with it.