The examiner will generally find a quiet place for this. The reason for this is so as not to inconvenience another road user. If you are asked to do a bay park this could be at the beginning of the test. You will need to be able to bay park on both sides either by driving in or backing in.
If it is the reverse park maneuver it will be just using a car on its own parked on the left hand side of the road. You will not have to do it between 2 cars as you would in real life. The examiner will understand that you are nervous and will be looking to minimise the risk to other people in case you get to close and they have to take action. Another reason will be to reduce the chance that the owner of one of the cars might intervene.
When the examiner wishes you to do a bay park you will be taken to a quiet car park or the quiet part of a car park. It is unlikely that you will be asked to park between 2 cars for the reasons stated above. Parking in a bay without any cars around you is actually going to be harder as you do not have the points of reference around you as you would between 2 cars.
You will be asked either to drive in or back in. Depending on what the examiner wants. If you have not done a maneuver during the test and you are coming back to the test center, your bay park will be done at the test center.
If you find its going wrong. Stop and do what you would do normally and correct the problem. If you are reverse parking and you are on the kerb. Go forward and steer yourself in properly. You do not have to redo the whole maneuver. On the bay park move and make your correction then into the space again.