If you're using 124, your third and fourth finger operate together. How would you propose to use the fourth finger *without* using the third?
We aren't talking about that, we are talking about the instructor telling him to never use the third finger. So, for bass playing purpose, they finger may as well be chopped off, is what the OP is saying.
The 3rd and 4th finger thing is another topic. As I understand it is from double bass, where the strings are much harder to press down than an electric bass. Personally, on electric bass, I don't see the point in using both the 3rd AND 4th. If the issue is stretching the hand, the stretch will still be in place if you're using 3 and 4 or just 4. If it is a matter of dexterity or strength, this can be built up using the appropriate exercises.
I think new players avoid using the little finger by itself because it is very hard at first and doesn't come along as easily as the other fingers, which in turn makes the finger never develop.
I have absolutely no trouble fretting notes with my little finger, I have built it up to be just as dexterous as my other fingers.
But hey, that is me.
