I have made the stencils on my Ellegante BLG (the first one) before I got my Babylock Jane that isn't computerized, and I have 'sharpened' needles using the needle sharpening pads. I don't use thread for either one.
I remove the thread from the needle and set the tension at 5.0. I hold the thread off to the left just enough to put some tension on it while sewing-thread barely moves, but it must move a little to prevent setting off the sensor. The thread does still go through the upper looping system all the way down to the last thread guide above the needle. Very little thread is used, and if you loosen the tension on the machine after you are done with the stencils, you 'could' remove the thread back out and rewind on the spool. I use an old spool of thread for this so I just cut off the thread that has gone through the upper threading system. Yes, it is cumbersome to do the stencils with one hand and to stop and turn often, but it works. It is the only way I have figured out how to do this.
Also, the buzzer will go off after sewing a distance without thread. Stop, then proceed. Get used to the buzzer. The stencils are worth it.
Another alternative is to buy yourself a cheap sewing machine and use it for making stencils. Check the thrift stores, garage sales, or Walmart sells them from $23 on up. For the tiny ones at Walmart, a handyman may be able to create a platform to put around the little machine to give a bigger sewing space.