I agree that it's too thick for insert 7, but what makes you say its not thick enough for insert 5? It's definitely quite a bit looser and obviously doesn't sit quite as upright because of it, but won't it still work if you're not worried about the aesthetics? I guess i'm just curious what your concerns were as i've been using mine this way and don't want to cause it any harm from the loose fit.
I no longer have my rMBP or the Book Arc, but I remember trying the size 5 insert and it did not fit at all, just slid right through.