Pipertommy... You raised a good question. Historically, people could book a trial flight which is exercise 3, but if it was in four seater such as a PA28 or C172, bring two friends or relatives.
Infact a number of years ago I can think a number of fliying clubs who were not only encouraging passengers on trial flying lessons or air experience flights, some were even offering sightseeing flights, as an air experience flights. I raised this issue with the CAA, as I considered these flights required an AOC, of course the CAA choose to sit on the fence.
i see no reasons why passengers should be on a trial flying lesson, not lease it is a real distraction between the instructor and student, for example your teaching effects to a student with his or her children vomiting in the back, I say that because effect of controls (yaw) are ideal for inducing sickness in pax.
I am unclear what the current situation is with EASA, and pax on training flights, but I would not do it anymore.