This is more than just a case of a diagnosis resulting in denial or suspension or a medical certificate though. Have you ever flown with someone whose behaviour has lead you to suspect they may be masking something? Have you encountered a situation where a trainee has been allowed to continue flying despite concerns from instructors that they might be better suited to an alternative career? Are training records 'adjusted' to better reflect the candidates ambition than their ability? Are professional pilot students referred for psychological evaluation following a training episode quietly returned to active (and solo) flying after a diagnosis by the school specialist of 'no fault found'?
I cannot really see how an ATO is at fault, unless of course they withheld relevant information as to his condition from the authorities/regulators?
I don't think this is likely in this case however does it happen elsewhere? Much is made of the responsibility of the certificate holder to report any decrease in medical fitness, but during initial training the ATO must surely have a duty of care?