It would be a lot safer for the instructor to call out "engine failure right engine" with no engine input.
Multi engine instruction has its risks. All flight training has risk involved. It is up to the instructor to step in before the aircraft and crew are positioned in a un safe situation.
There is a reason you need to do a multi engine training approval before you go simulating failures.
There is a reason you need to see exactly how the aircraft with perform when an engine fails.
There is a reason you need to feather the propeller when the engine failes. There is a big handeling and performance difference which the candidate needs to see and practice.
There has been a couple of threads recently that have made me start to worry about the current quality of multi engine instructors. It makes me sick thinking about the poor kid that is going to kill himself and his family when an engine stops all because he never received adequate assymetric training.
ME turbines are a diferent beast and need to be treated with even more respect. There is a reason they make you do the training in a simulator if one is available.