In the real world, the certificated pilot, (or controller) is the party that is legally liable. The uncertificated student has no liability unless some action was deemed an intentional act to harm or destroy.

With modern equipment, (such a buddy cords), an instructor can easily intervene even at lower altitudes.

But you mentioned something else in your scenerio. You mentioned wind gusts. Please explain why an instructor would select a day with gusty conditions to practice low approaches. And please explain how this is not poor judgement and unlitmately not the fault of the instuctor.