I don't think it's a problem with your latch. It can't be any looser than the latch on the knife I have right here or it would fall off. Yet I don't seem to have the problem you describe.
On trick that I do like to do is to put a few layers of black electrical tape around the outside of the latch just to cushion it in case it does fall between the handles during a closing. Without the tape, this will either damage the latch or the blade. I'm gonna put pictures of this technique up on my web site, http://www.4cs.net/~gollnick,
From my understanding of your description, though, that is not your problem. In fact, I think your latch may not be loose enough. As you manipulat the knife, the latch should be more or less straight out by centrifugal force (Imagine attaching a ball to a string and swinging it around in a circle. The ball would be pulled to the outside of the circle pulling the string into a tight line. Similarly, the latch on your knife should be pulled out to a straight line.) If the latch isn't loose enough to move, the centrifugal force you generate as you manipulate the knife may not be enough to overcome the friction and pull the latch out straight.
The other option is that you're not generating enough centrifugal force. This can be a problem if your balisong is to small for your hand. Or, you may need to use a bit more force and get a bit more speed.
On the other hand, one of my favorite balisong drills is to put on some slow music and slow my routines down and try to be very flowing and very graceful. Even then, I don't experience the latch hitting the blade.