In a small club racing, the racing instructions state "even if the I flag is not displayed, (which we never use) any boat over early must go back around either the committee boat or the pin end and restart. I think the correct way is to go back behind the starting line and do the penalty and restart. If you started on starboard tack having to Tack to port tack and go around the anchorded Committee boat is a dangerous move.
Patrick
Agree that having to go around outside of the pin or Committee boat for every OCS boat could create dangerous situations. This is probably why having to go around the ends is not standard procedure. Rule 21.1 says boats returning to start correctly must keep clear of other boats, so they have no rights. Like @Davidsailor26 suggests above, an OCS boat in the middle of the line might be able to dip back below the line with fewer crossing issues (read: more safely for all competitors) than having to round the ends. Your RC may be trying to scare people into not being early, but limiting their options could lead to collisions, damage, and people getting hurt.
Do note that beyond restarting properly by returning to the pre-start side of the line, there is no other "penalty" for being over the line early.
Unless one considers not being scored at the finish because they were OCS and didn't start properly.