Luke forwarded me an article from his old stomping ground in Perth about not fully committing to the knees out theory while squatting. Here is the video from the post.
If you decided to skip the video, it is essentially telling you to keep your legs in a natural forward position. You are not forcing out your legs beyond the their natural position which is typically possible in athletes with a reasonable flexibility. By keeping your knees forward and up you are keeping your legs in their natural gait and focusing on using your quads instead of muscle groups like you hip flexors.
When the coaches tell you to push your knees outward typically you are letting your knees cave in on themselves. This causes a lot of unnecessary tension on your knees that can lead to pain and injury. Here is the link to the full article from lifthard.com