From The Jedi Path by Daniel Wallace:
Trial of Courage Establishes a Jedi’s skill and fortitude in the face of danger and overwhelming odds.
Even if your talents lean more toward diplomacy than war, courage is an intrinsic part of being a Jedi. Though the Force is with us, we are small in number when compared to the people of the galaxy. We have numerous enemies, and must also contend with those who do not understand our Order and therefore misinterpret our motives. As Jedi, we can never relax our discipline–nor can we fail to confront injustice is no Jedi at all, which makes the Trial of Courage a revelatory test.
I cannot tell you what you will face in your Trial of Courage. Its purpose is for a Padawan to persist in the face of fear. If you know what the trial will consist of, then the true measure of your courage will not be tested.
In previous eras, a Padawan was considered to have passed the Trial of Courage if he or she demonstrated battlefield heroics such as standing up to a vastly powerful Sith Lord. Similar dispensations were handed out by the Council during the last war. But in such situations it was at times difficult to sort out courage from recklessness. Overconfidence is a flaw, and rushing in unprepared can often make things worse. Courage must be aligned with the fourth precept of the Code: There is no chaos, there is harmony.
The war is over, but the Council may still assign special missions to Padawans who wish to pass the Trial of Courage. The mission could simply be a creation of the Council to test your reactions within the Jedi trials Chamber, or it could be deadly dangerous. Regardless of the nature of your challenge, it is important you do not share the details of your experience with your fellow Padawans. All must experience this Trial untainted.
“The Trial of Courage measures a Padawan’s willingness to fight evil despite the fear it may instill.”
Testing a Jedi’s courage in battle is very difficult, unless fate presents an opportunity that can be observed, but it is unlikely. It is possible that a scenario could be prepared and presented without the students knowledge, but that would require willing participants that are both unknown to the student, and skilled actors. Possible, but not easy.
Another route, is to test a Jedi’s courage in handling fears that are non-confrontational. It would take some deep searching, but find what the student is afraid of and expose them to it while having them complete some sort of task. Don’t go overboard on this and force them to wade through a pit of snakes if they are afraid of snakes, but have the thing that they fear present somehow. Each fear would have to be addressed differently of course.
Ways to “test out?” Well, does the student regularly encounter something they are afraid of and still manage to act in the face of it? Is the student afraid of heights yet works in the catwalks of a theater? Are the afraid of flying but have already managed to fly a few times? Are they afraid of sharks but somehow swam with sharks?
Combat again is a possibility, but again it is difficult to prove that one has faced an opponent directly in a fight and stood their ground. If enough of a case can be made however, this is, as I said, I possibility.