Mine was bent way down, so it was forcing the thread to drag across the top of the machine from the spool. It still sewed OK but I didn't like that. I actually did try flipping it over, from the pictures that looked like maybe how it should be (before I realized it was bent) but that didn't work out. I spent a while bending the bracket part of it and also the thread loop part before I got it to where it would stay threaded and not drag the thread across the machine head and also still be open enough that I could pop the thread into it without having to thread it like a needle. It was definitely fiddly and I was afraid I would break it, but it seems to be working pretty well now. I have only really done test sewing though, haven't sat down and really tried to USE it yet.
You're right though, definitely not the best design I've seen. I think if it starts coming out again I'll just crimp that loop down a little more and just start threading it like a needle!