It sounds as if your homebirth midwives were/are confident, capable, and reasonable in their actions. They assessed your tear individually, taking into account your anatomy, your environment, your capabilities. Then, they gave you all the information needed to make an informed choice about your own healing, and, it sounds as if you healed beautifully.
When assessing whether or not a tear needs suturing there are many things to consider, not just defining 1st or 2nd degree. Is mama going to rest and stay down? Are her tissues and healing capabilities normal?. Would other modalities assist the healing process better than a needle and thread? Does the tear flap or gap when mama is in a reclined, knees up position or does it stay approximated? How is the bleeding at the tear sight? (ie. weeping, even with compression) All these things go into the evaluation.
I saw some pretty horrific yoni infections from sutures in Central America. IMO docs love to stitch, it's what they were taught to do! They stitch up every little nick on a yoni and sometimes that creates more problems. I always try to ask myself at a birth, now what would my ancestors do?
That said, anecdotally, I remember one mama, she had a really good Y shaped tear on her pelvic floor that did not want to approximate. As hands off as I am I wanted to stitch this. I gave her all the info and a mirror and we talked about the reasons it should be stitched, In the end she decided, no stitches, she was adamant. I was really nervous about this but respected her choice. It took a while, plenty rest and herbs but eventually it healed on it's own. She jokingly referred to her yoni as a 'frankenyoni', but it did heal.
I think the hospital midwife who was shocked has just never witnessed the other side, so to speak.