You have to remember that people reading or leaving replies on pprune are from anywhere in the world.
The term 'regs' sounds like a US instructor to me and and anyway seeing as there is no British or JAA law forbidding a turn before 1000' agl he mustn't be a UK pilot.
To answer your question rule 5 merely wants to protect Joe Bloggs from any of us pilots flying too low. Of course we have to take off and land at some stage that is why we have the exemption. But it doesnt state that you have to climb straight out and not turn before 500'agl, that is purely an airmanship factor.
Oh and yes, doing right from the beginning is far better for the student.