You wouldn't be able to spread the top two passes properly if you were tying under bum and you do need spread all 3 passes with a stretchy or it's not safe. You could try the normal Front wrap cross carry (tied at your back) as you can spread all the passes that way
For older babies with good upper body strength and full head control it is fine to bring the wrap up to the armpit (usually from 4 months on). Totally fine to let their arms out if that's what your little one prefers. Just make sure the wrap has been tightened snuggly.
