A loose starting picture is fine. I just would not make the children responsible for protecting the picture.
A diamond can help an U8 understand that somebody can be behind the ball, somebody can be higher and there can be space either side. But once the game starts, I want them reacting to where the ball, teammates and opponents actually are.
The warning sign is when “you are the back player” means the same child never joins an attack, or the wide players are told they cannot cross the middle.
I’d use the shape to get the game started, then coach simple relationships: can we help the player on the ball, can we make the pitch bigger, can we get back into the game when we lose it?
Formation as a reference is useful. Formation as a cage is not.