My design allows for an 1" of piston movement which should be more than sufficient according to my fellow engineers.
One comment on your piston movement distance. The engineers are correct if they are going on the minimum cross sectional area of an open valve based on 1/4 the valve seat diameter. As long as the valve to piston gap has the same area as the valve outlet orifice, you should be good to go.. if you are working with water that does not compress.
Due to speed of sound, and turbulence through the valve, there will be a pressure drop through the valve. With air the pressure drop = expansion of the volume of air.
In the above scenario, air passing the gap between the piston and valve seat results in a pressure drop. If water, about 1/2 the pressure difference between chamber and valve seat and the other half from valve seat into the barrel, but your volume has EXPANDED due to pressure drop. This reduces the total amount of flow that can enter the barrel due to higher volume and lower pressure in that area.
By having the valve open slightly larger, you can reduce the pressure drop, velocity, and turbulence in the gap between the piston and valve seat. This results in Higher pressure of air entering the barrel and the air is entering the barrel at higher pressure due to the higher pressure and at lower turbulence.
I generally design so the piston as it plows into the bumper compressing it moves about 1/2 the valve seat diameter, so for a 3 inch orifice, about an inch and a half. It is ok to have less gap after the piston starts to return from the bumper. You want insane acceleration at the beginning of projectile movement in the barrel.
Pass this note to your engineers.. See if they can shed anymore insight on this. One inch will still give fantastic flow, but why limit it when you don't need to. Use a good bumper for a proper deceleration distance to keep forces minimum on plastic parts. Without one, the piston will hammer it's way out the back.