I have never done a practical PTS assessment. My PTS has always been a Theory Assessment. My Competency is assessed as a combination of practical/theory but my competency cycle is separate from my PTS assessment.
It's the same way we assess rules. Mostly theory, some practical observation, some scenario based. How would you assess evacuations etc. ? It's a theory and scenario based discussion. Nobody can ever be sure if you have the ability to practically apply the rules and regs in every situation. Train people first. That way you can have some security before going out on a live railway where the risks could cost you your life. Give people knowledge, before we put them in danger.
I still remember the first time I stood next to a unit at track level and the first time I had to put the bar down. I remember when my first Trainee had a unit moving less than a foot from him. Passing the theory arms us for the reality of the crazy workplace we live in. Without the confidence of the training behind me or my delegate/candidate/trainee; the practical side would be pretty scary.
TOCs will assess each part of their competency using a variety of methods. As
@TreacleMiller rightly states. Employer/Role is very important here as it will determine the outcome.