Epstein puts the bat on the deltoid so that the drill also encourages keeping the hands back and not disconnecting. Doing it your way is fine. I use it both ways. But, putting the bat on the shoulder helps them learn to keep the arms out of the swing. Just turn and use the hands, and use the hands early, not late after pulling them from the shoulder.
Epstein didn't invent the concept, he just gave it a name. Former MLB player, Max Venable told me back in 1997 to have kids learn by getting the lower half set as in this drill.
IMO, until they learn the proper lower half position at contact (front leg straight, back leg bent, hips turned) not much else matters.
I've done the 'Torque Drill'and have had my DD practice it also. I see that it kind of fits with the way you show the swing. I may be wrong? The problem I have run across is after you remove the bat from the deltoid, Epstein kind of leaves you 'hanging' on what the hands should be doing. Again I may have missed Epsteins explaination of the hand usage. Seems when doing the Torque Drill a hitter pins the bat against the deltiod and rotates toward contact (I know theres more ). This does get you in the 'lag' position but, if you believe in the 'turning of the barrel' behind a 'corner' it seems that teaching conflicts. I had a problem with what the hands need/should do once you remove them from the deltoid.