My latest attempt was to take a cheap plastic funnel and place it over the top of the thread spool. I’m happy to say this completely solved the snagging issue and it had no notable effect on tension! I was able to sew an entire belt and had zero problems. Since doing this, I’ve had the chance to dozens of holsters, several belts and a journal cover without a single snag.
If you decide to give this a try, just look for the smallest and lightest funnel you can find – but it should probably be slightly larger than the diameter of your thread spool. Try one of the kitchen utensil isles since they will probably be smaller than the typical automotive variety.
I assume this will work for other machines too if you’re experiencing the same problem with other makes & models.
Special thanks to Wizcrafts on the www.leatherworker.net message board for the idea!