What would be the litmus test for a "good" instructor to determine if a student is weighted correctly, and if they know how to account for changes in gear configurations?
With PADI, students are required in the pool sessions to do a weight check by holding a normal breath and dumping all the air from the BCD without kicking. With perfect weighting, the students will float at eye level and then sink when they exhale. If it is done with a full tank, they are often advised to add a few pounds to allow for the weight loss with air. Many people disagree with that, saying the method traps enough air in the gear to allow for that extra weight.
PADI requires a weight check with each OW dive. The understanding is that no system is perfect, and as the diver continues, they will continue to refine their weighting needs. By making these changes over four dives, you are also dealing with the reality of the situation--if you have a class of students, making each one as perfect as possible for the first dive will be such a time-consuming exercise that the instructor is unlikely to do it. It can work fine, though, if the instructor can say something like, "OK, you are a bit heavy right now. Before the next dive, try taking off 4 pounds."
Here is an example. I did OW dives in a fresh water lake for two divers whom I had not had in the pool. One of them had done his pool sessions in a 7mm wet suit instead of the usual 3mm suit because he wanted to have his weight perfect for the lake. He told me that because of that, he knew he needed 22 pounds. I looked at his slight frame and thought, "No way!" I also knew his pool instructor still did intruction on the knees, so I did not trust it. He was adamant, but I talked him into doing dive #1 with 18 pounds to start. I also showed him how to distribute the weight for trim, which had not been done in the pool. When we did the weight check, he sank while holding his breath. We did the dive and he was predictably clumsy. We started the next dive with 14 pounds, and he was still heavy. We did dive #3 with 12 pounds, and he was so much better in the water that he was elated. We did the final dive with 10 pounds, and he was great. IN that process, he learned how to check for his weighting, but more importantly he truly understood the benefit of being properly weighted and having the weight distributed for proper trim.
Unfortunately, the instructors who have the students kneel on the floor of the pool will also have them kneel on the bottom of the OW site whenever possible. They will thus still want the students overweighted. When they do,
they are violating standards, but they need to do it in order to use their poor instructional technique.