This training mission - in which the CASA Inspector was observing the Chief Pilot checking a very experienced inductee - would have been meticulously planned and briefed. Yes, there would have been some pressure on both operating pilots with CASA in attendance, but both would have experienced this before on several if not many occasions. Each of the three would have known the sequence of exercises, how and when emergencies would be simulated, and the speeds/pitch attitudes to be flown.
The problem with what you have stated is that if you are correct, they have taken all reasonable precautions and it could happen to any of us.
...and none of us want to go to work tomorrow believing that.