The argument against the closed toe is that while it keeps anything from entering the toe, if anything enters the throat, it can't escape through the toe. That it encourages dirt and debris to collect inside the holster. Personally, I use both and don't find it to be much of an issue either way.

The stitched toe or plug is just a design variation. The plug is just more appropriate to the flap holster pictured above. It is also more difficult and time consuming. Notice it does have a hole to allow water to drain out, should one get caught in the rain.

This is a plug:


This is a stitched toe. Not too big a deal to cut a longer welt and stitch it all the way: