Its no harm getting guys in to spar early on as long as you make sure they are not gonna get hurt, you have to feel new guys out so many think it will be easy so its best to get them to realise its not and if they continue generally they end up as decent fighters.
Its also good for confidence in the early stages as long as you make sure they are safe and dont get battered they feel good when they leave the ring and gradually step up the competion as they improve
The more a fighter is in the ring the more comforatable he will be when he is competing
I dont agree with the method used by your trainer it makes younger or inexpierenced fighters afraid to throw punches for fear of a beating.
I focus on getting younger guys comfortable in the ring, keeping there hands up, not looking away from the target, full extension on the punches, good footwork and so on once they gain a good shape in the ring grow in confidence then we can get down to hard sparring