Purpose of flight was to prepare the left-seat pilot for a type rating, and this was his first landing since completing ground school. There was another student in the jump seat, and two more in the back of the airplane. The airplane was landing on runway 31; winds were from 010 degrees at 16 knots. The airplane touched down in a crab, bounced, touched down again in a left drift, and then the left main gear collapsed. The students in the left and jump seats stated that the CFI called for touch-and-go; CFI stated that he did not. The flaps were found in the full-down position. The CFI had made only 2 landings in the airplane during the previous 4 months. During postaccident testing, gear would not free fall to a locked position until weight increased well beyond acceptance criteria. The lead seal on the down-and-locked indicator switch was missing. Switch adjusted in 1/16-inch increments; adjustment inconclusive. Black material was found in the locking collar, but whether the amount found would have affected the lock mechanism was also inconclusive.