Mixes >40% O2?

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IMHO this is a terrible idea. In a situation where you would have to share air with an out of air diver, and somebody was injured, explaining why you allowed a student to breath a gas they were not certified to dive might be tricky... Just my 2 cents....

Its a complete non issue.

Question:- is the gas safe to dive at that depth? Answer is yes
Was it an emergency situation? Answer is yes.

You're not going to get grilled over using a safe gas in an emergency situation!

Quite a lot of instructors teach on nitrox (if they get it for free!). The students aren't nitrox qualified. Despite that i don't hear of court cases with unqualified students using nitrox 32 sharing air with an instructor on the AAS ascent and so on.

I'm always concerned by courses where the instructor is unwilling to dive the same gas as the student.

The student isn't doing 3-5 dives a day with numerous ascents/descents chasing students and repeating that sort of day for 3-4 weeks in a row with no break though!
In the same way a student maybe happy in a 5mm wetsuit while the instructor is in a drysuit - he isnt in all day, every time for an extended time period.