A sit spin doesn't need to have the leg touching to be a sit spin- there are a billion variations. You could do a broken leg sit, for example.
However, I would think if you are going for a "classic" sit spin, and it is a little iffy on speed and position, having it in a nice position, with the knees touching is going to make the judges more likely to give you the benefit of the doubt. Having the free leg far from the skating leg is sloppy if you aren't intending it to be out there. (My coaches pet peeve is what he calls toilet bowl sit spins- the legs are touching, but there is an open round space at the top. But I've seen plenty pass- often with a note to work on position.)