I am no hardcore D&D rules lawyer but even the little I know about Mindflayers you are both kind of wrong.
The Illythid are not just the tadpole that burst out of the host and becomes the Mindflayer. The tadpole consumes the knowledge and all that is the host eventually gathering enough psychic energy to force the host to change to its new body form. Consuming the matter of the host to create the new host. This is partly why the Gnomes make poor hosts for Mindflayer tadpoles... because they lead to "small" mindflayers and they tend to keep their gnomish antics. So I tend to look at Mindflayers more like the "Zombie-ant fungus" that gradually eats the brain of the host ant until it controls it and then bursts out of it using the remainder of its hosts husk to act as food for its continued growth.
