The problem with inserting the latch in first (BTW is that latch facing up or down?) is that you are inserting the fattest part of the bali into something that wasn't designed to do so. If the sheath is made of leather or nlyon, eventually both will wear out as the amount of friction from wear is too much. As you've no doubtly found out.
To pull it off with kydex will require that the sheath be either channeled for the latch, which is a real pain to do if you don't have the right mold (most likely will require an insert to ride along the side of the handle next to the latch to prevent the kydex from forming around the latch and provide the channel form), or it'll need to be done as a break-open model with the latch sticking out of the sheath, but with some detent built in so it engages the latch as it's drawn. So far I haven't seen anything like that, but that doesn't mean it can't be made, especially with some of the talented kydex sheath makers we have with us.
But the question remains if that is necessarily a better way of carrying the bali? Are you really gaining that much of an advantage with the delay in drawing to ensure the latch is disengaged, versus the quicker of out the sheath style of the tang first model, and disengaging the lacth with your thumb while in the draw arc, as I do it?
Interesting concept..... I like a little more time to evaluate please.