So I seem to have found an effective workaround. Tried using Premier Pro to input and it happily keeps the digitizing as one single clip. It remains interlaced and so I can de-interlace happily after and I get the quality I want. Sections which Final Cut Pro cut up into clips resulted in lost frames so a jumpy sequence. Using Premiere did not do this, so those sequences are smooth. That's the way to go, but too bad Final Cut will not allow us to input as a single clip, if we choose to.
Having said that, at this point digitizing old video is probably not a primary function of Final Cut Pro these days, so they probably will not look to address this.
Thanks to respondents for trying to help.