At all times you are responsible for your own safety, the safety of your pupil and the safety of other road users. In certain circumstances this can extend to taking physical control of the vehicle to manage a safety critical incident. If you fail in this basic responsibility, at any time, you will fail the standards check.
From a training point of view, you are also responsible for developing your pupil’s awareness of and ability to manage risk (as the driver, your pupil also has responsibilities). This is the objective that is being assessed in this section.
It is NOT a requirement that you mention dual controls, try to keep it real. An examiner might expect if you had brought a new pupil a lot of detail of how and why you might intervene, what the pupil needs to do if you do intervene and what would happen afterwards
A pupil you had been working with for some time might not need as much discussion as there will be patterns developed over your time together, so it may be as simple as saying you have their back as always and that if I need to intervene I will, and we would then discuss what can be learned from it.
The important thing is that your environment needs to be safe, you must manage that risk and also help the learner how to manage the risk for themselves by transferring that responsibility to them if possible.