I believe, as has been said, that so long as an AME has not uploaded the application # to the FAA, the individual should be ok to edit.
Under the current system, though, I concur that many young CFIs who are themselves focused on building time to move up to airlines, do not understand the implications of a denied medical. The flight school where I started my PPL wasn't so aware of this, and they are a top-notch outfit IMO. I think every flight school should have a big placard that explains the risks involved in both seeing an AME before you understand what a denial could mean, and also the seriousness of being anything but 100% honest when you do submit. CFIs should absolutely know this stuff.
I am so grateful for the advice I got here on POA to get your ducks in order and understand the risks. For me, the possibility of having even the Sport Pilot route closed was not worth it. I very nearly closed the door on myself. Hopefully, the new MOSAIC rules will open things up, and maybe even remove the 3rd Class Medical. One can dream ...