Hi,
I have 3 Babylock machines....and my dealer said to cut the thread at the spool, pull it out down thru the needle. Yes, for the tension discs, but also because of thread fibers as you are pulling it backwards up the thread....hard to explain! If you pull up on thread you are going against the "grain" of it and some will leave "fuzz" in your machine insides. Especially embroidery thread is more fibrous.
I always cut it and pull it out thru the needle....it's thread!
Bev