"The airplane must be controllable and maneuverable, without requiring exceptional piloting skill, alertness, or strength, within the operating envelope ... (despite) flight control or propulsion system failure"
"Continued safe flight and landing means an airplane is capable of continued controlled flight and landing, possibly using emergency procedures, without requiring exceptional pilot skill or strength. Upon landing, some airplane damage may occur as a result of a failure condition."
So you must be able to glide to a landing, or at least a controlled crash, if you lose engine power.
The FAA is correct here. The "eVTOL" class of aircraft based on quadrotor drone technology will fall out of the sky on either a power or control failure. It's worse than a helicopter, which can usually autorotate.
[1] https://www.ecfr.gov/current/title-14/chapter-I/subchapter-C...
Here is the exact definition:
> (425) Powered-lift. A heavier-than-air aircraft capable of vertical take-off, vertical landing, and low-speed flight that depends principally on engine-driven lift devices or engine thrust for lift during these flight regimes and on non-rotating aerofoil(s) for lift during horizontal flight.
I would expect most of these "scaled up quadcopter" companies to incorporate an emergency parachute system to handle similar to a Cirrus CAPS.