Crashes, or at least wing tip strikes, are not uncommon on an initial jet type course during engine failure training on take off, on what are called "V1 cuts" (engine failure just before or after rotation speed) especially with pilots who are new to swept wing airplanes (if you are slow with the compensating rudder, the plane rolls very hard once the yaw angle gets large).
So a crash on take off during that type of maneuver would be no big deal on an initial, especially for a pilot new to jets. If a pilot is not able to get the hang of it and, you know, stop crashing, that would be a problem (you'll be expected to get the hang of it on the second or third try). If you can't be brought up to a safe standard fairly quickly, you'll just get washed out.
A pilot who crashes during V1 cuts on recurrent is a bigger problem. Everybody has "brain farts" and a single event that is followed by a normal skill demonstration may just be written off as a one-off (although it all goes on the pilot's training record). Skill deficiencies that are quickly rectified, and are not accompanied by other warning signs, won't hurt you too much. A flub followed by a competent demonstration will just mean a debriefing item after the session.
Skill deficiencies that are kind of borderline, but not bad enough to take someone off flying status, may just mean delays in being upgraded to captain. An experienced captain who has these sorts of problems on recurrent could face restrictions on operating as PIC or other restrictions as the causes are explored. It usually means something has changed in the person's life.
Pure skill deficiencies, whether they result in crashes or not, won't be punished professionally unless there is willful misconduct or severe personality issues. The training organization will work on correcting the deficiency up to a point. A much bigger problem is mental attitude deficiencies and personality problems - those will hurt you more than losing control during an engine failure in the sim.
One of the things the airline will be looking for when a new pilot is evaluated for selection is signs that the pilot learns and adapts quickly. During the evaluation, you are just told to perform some maneuvers and "do what comes naturally" without any help from the evaluator. They are looking to see how fast you catch on to things on your own.
One important facet of training is to "make things memorable", and the instructor may allow a crash to occur, say in something like a terrain avoidance maneuver, to make the lesson sink in (depends on the instructor and the training unit's policies - the instructor may just suspend the sim just prior to the final "crash" to avoid having to reboot the machine).
Also, you have to account for the basic realities of sim training. Sometimes you get pushed to the edge because if you are performing well, the instructor will keep adding pressure until you start making mistakes - it's a basic method of skill evaluation. At the end of a four hour session, you are pretty worn out mentally and physically, and if a new pilot you may be totally frazzled (I used to joke that it was like 4 hours spent riding in a cement mixer filled with bowling balls, if you had an instructor you enjoyed pushing you hard). A crash near the end of a session, like running into a hillside during a terrain encounter, may just be put down to late-session mental fatigue as you were (quite deliberately) loaded up to burnout.