I always have mine just below the left shoulder d-ring so that the connection for the LP inflator is slightly lower than the D ring. This is so the LP hose from the reg can pass through the bungee on the d ring and when the inflator is raised, it slides easily along the LP hose. DO NOT put the corrugated hose through the bungee. It's not meant to go through it. I see a number of people make this mistake the first time they set up a BPW without experience in using one.
The inflator should be short so that it's not flopping around like an AIR 2 type device. You only need it long enough so that you can turn your head and dip you chin enough to orally inflate it.
This is so that it doesn't get tangled up in stage bottles or other items you may have clipped off to the d ring.
If you don't plan to use stages at all, it's ok to be a little on the longer side but it should still be neat and tight to the chest when not in use.
A piece of inner tube is generally used near the top of the corrugated hose to pass the LP inflator through, It doesn't need to be anywhere near the inflator itself or lower than the middle of the corrugated hose as it will impede the sliding when you raise it.
If you look at many jacket BCs, this is the reason people struggle to dump from the inflator. The velcro strap is too low on the shoulder strap and it pretty much forces a trap to form in the hose when people try to raise it.