Note the key words there. The CFI is still the legal PIC of the aircraft however this FAR allows the student to perform the duties of PIC in lieu of being solo for obvious reasons. As a CFI you would simply log this as a multi-engine flight in which you were the pilot in command. You do not however log dual as you are not providing instruction to the student during this time.
I know there is some argument concerning this..mostly due to guidance from various sources, including different FSDO locations BUT on more than one occasion I've successfully argued and backed up my claim to DPE's, POI's and the FAA that you most certainly CAN provide instruction during these flights AND log it as dual given/received. Nothing prohibits it whatsoever.
Its correct to say that the FSDO is not authorized to provide
final legal interpretations of the FARS, which is the realm of the Office of Chief Counsel
http://www.faa.gov/about/office_org.../agc/pol_adjudication/agc200/Interpretations/
They are however tasked with and allowed to disseminate offical policy on standardization and applaince of the regs..at least until god forbid some scenario arises in which a legal opinion is needed.
As far as the student being the official PIC.not unless he's rated in the aircraft. Period.
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mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:-1610611985 1107304683 0 0 159 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; mso-bidi-font-size:10.0pt; font-family:"Times New Roman","serif"; mso-fareast-font-family:"Times New Roman";} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.0in 1.0in 1.0in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} --> </style><!--[if gte mso 10]> <style> /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} </style> <![endif]--> This is an excerpt of the preamble of the final rule correction document that was issued in the Federal Register (78 FR 20284; Amdt. No. 61-104) on April 23, 1998:<o
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[FONT="]In addition, the FAA has revised § 61.129(b)(4) to permit an applicant for a commercial pilot certificate with a multiengine rating to credit the 10 hours of flight time performing the duties of PIC in a multiengine airplane required by that paragraph toward the 100 hours of PIC flight time required under § 61.129(b)(2). This revision is consistent with the provisions of § 61.129(b) as proposed in Notice No. 95‑11. As previously noted, proposed § 61.129(b)(4) would have required an applicant to accomplish solo flight time in a multiengine airplane. The solo flight time would have constituted PIC flight time; therefore, the applicant would have been able to credit that flight time toward the requirements of § 61.129(b)(2). However, under § 61.129(b)(4) as adopted in the final rule,
an applicant would be performing the duties of PIC rather than acting as PIC. Consequently, that flight time does not constitute PIC flight time. Therefore, the FAA has revised § 61.129(b)(4) to permit the crediting of flight time accomplished under that paragraph toward the requirements of § 61.129(b)(2). However, this revision
does not permit an applicant to log the flight time required under § 61.129(b)(4) as PIC flight time under § 61.51(e) unless the applicant holds a private pilot certificate with a multiengine rating and chooses to accomplish the requirements with an authorized instructor[/FONT]