Several times I have said that the knitting sheath should hold the needle firmly.
Yet, just now I caught myself using a US00 needles in a knitting sheath bored for US1 needles. In fact, I have a whole tray of needles smaller than US1, and all my current knitting sheaths are bored for US1 or US0 needles. Yes, I knit with needles that fit very loosely in the knitting sheath a good deal of the time.
Well, I put a lot of effort in to learning to do that. And, I find that students have a lot of trouble if the needle does not fit firmly into the knit sheath.
I still think that learning to use a knitting sheath is much easier if the needle is held snuggly. It is not necessary, but it is easier. And, it is more important for gansey needles where there is a spring load on the connection between the needle and the sheath.