Ruby on Rails – How to Implement a Truly Global Variable in a Rails App

The idea was put up in rails best practices: Replace instance variable with local variable

Basically if you don't use many partials or have a single plain view for each controller method just using the instance variables in the view wouldn't really cause any trouble.

Nevertheless, if you use many partials and therefore have many instance variables declared in your controller..., it might be less confusing if you use the alternative of passing the controller (instance)-variable to the partials explicitly. That way - while working in the partial VIEW - you have one explicit reference to the variable/object you want to work with that is not shared with 'all' partials that are included in the creation of the page.

After all, you can handle this just as you like to handle it, noone will tell you to do it otherwise. My personal view, however, is that I like the idea of having explicitly references in my partials/views that can not be confused with other variables.

There may be something missing from my understanding of constraints you face. I would have thought:

1. User login is part of the setup for each test. Do it however you need as part of the test framework. If it can call the parent that's fine. If it can just set up some status variables that's fine too. [I don't know what you mean by dummy app.]
2. Engine tests should be part of the engine, rather than part of the parent. They should have minimal dependencies.

Perhaps the information missing is what is implied by user login and why it's at all hard.

It is a routine part of constructing any kind of automated testing, whether unit, functional or integration, that you have to write mocks and stubs. I think that's the way to think about this situation. You don't need a real user validation, just a 'good enough' mock.