I don't know the circumstances where you were denied, but it is just fine to have electronics in the coupler. The pic shows several examples from my rockets. I personally don't like the idea of having the igniter in the coupler - I always do that from above - but separation charges or electronics for recovery of the booster are fine.
So far as I'm aware, there is no rule that requires tilt for two-stagers. I think a local field could do whatever they wanted and maybe that is what you encountered. Personally, I fly with tilt lockout whenever I can, combined with an altitude check. I don't think any high power two stager should fly with a simple timer, and if that's what you were doing, then I would say time to upgrade.
I'll let you know the next time I get turned down for a two-stage flight, although there are a few times when that might not have been a bad idea (Bad Idea knows where the dirt is).
Jim
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