ISI has this rule now (although many do not follow it) that you can only teach 1 level below what you have passed.
AHA! That would be one incentive for me to pass that FS7 test... walley and all... WOOHOO!!!
But I digress... my point of contention is:
Should a coach be teaching things he/she hasn't mastered himself/herself?
As with all other responses, this one is also "it all depends!" BUT the basic premise is, the coach must be familiar with the technical aspects of the elements. Figure skating is certainly not something one can master from a book, and how else to be familiar than having done it yourself!
To be sure, while I was working on the Axel (that horrendous jump!!) I would feel like it was almost there and of course I could teach it... After all, I knew what was required technically, I knew what each stage of the jump should be like, and I knew some little exercises to work on that would help with it ... That was many years ago, when I did not have students at this level, so the point is moot.
When I finally "mastered" the Axel (i.e. got it more-or-less consistent), I realise that at the previous stage, there was something missing - the "feel" for the jump. While that is not easily explained to the student, it is something a coach needs to have in order to understand what needs to be fixed, and fix it.
So, as a general rule-of-thumb, one level below your test level seems like a pretty reasonable gauge. Then I look around the rink and wonder... oh nevermind!
Years ago, I told one of my beginner student's father that I would grow with my students. I know that I have, but now am pressured to grow a little faster! Perhaps I should seriously consider FS7 sometime...