I am absolutely flabbergasted.
GUE requires a specific setup as an agency because they believe it is the best way to do it. It is agency policy. SDI absolutely does not require it, so you have an instructor requiring you to use specific gear for his own individual reasons. Now, please pay attention to what follows.
When I became a tech diver, I began to use the bungeed necklace for the alternate, as i was required. I liked it, but I continued to use the traditional octo setup for my recreational diving, because I did not want to bother to change things up. I always had the problem, like you, hat the octo kept coming out of its holder, no matter what kind I used. As an instructor, I saw that my students' octos kept coming out of their holders as well. Then I read about a case in Europe in which a woman went OOA and went to her buddy for his octo. But guess what? It had come loose from its holder and was floating behind him. She couldn't find it, panicked, and drowned. I switched my equipment over the next day.
OK, so you have a super special instructor that you want to use no matter what who is demanding that you use inferior equipment. All right, if you insist. But as soon as you get done with that class, go and get it done right.