Where does the stuff go? How big does the bag get?
Without the interdimensional space, putting 12 cubic feet of stuff would result in a bag that is 12 cubic feet in size -- because there is nowhere for the things to go. The item as written decreases the weight, but not the size of the item. So, the party looks like they stole Santa's bag.
Let's think about this a bit more. If the bag doesn't shrink items, then it is decreasing mass but not volume, decreasing the density of the items. Thus the bag becomes less dense the more volume you give it, and so if it becomes less dense than water, it can be abused as a flotation device, and if it becomes less dense than air, it becomes a balloon.
If you update it to shrink the items, you run into some other problems I'll address later.
How long does it take to get something out?
Without the clauses about pulling out the right object, you won't be able to pull the right object out quickly, so you'd have to dump out the entire 12 cubic feet of troll parts to find the 3 silver pieces rattling around the bottom of the bag.
What happens if the bag is ripped?
Is the item able to be ripped? Magic items, by default, are indestructible by normal means, and without a clause about the bag is open to weird abuse, especially if things don't shrink on their way into the bag. Because you can push the indestructible 12 cubic foot bag that only weighs 5 pounds against a door, or hide behind it.
If it can be ripped. Do the items that leave the bag through the rip remain less dense? And if you add shrinking to address the first question, do they also remain small if they fall through the rip? Or do they suddenly regain their weight and size?
Frame of Reference Challenge
The issues you have with the Bag of Holding can be solved in other ways. Such as not giving it out in tier one play (or at all) or simply forbidding its misuse and abuse. Your item is poorly thought out patch to a problem that isn't about the item, it is about your players -- or at least how you think your players will use the bag.
[C]lauses about bad stuff that happens if you put it into another extradimensional space
If that is a problem at your table don't give them any other extradimensional items if you give them a bag of holding. Spells that create extradimensional effects are higher level spells.
they can also can use it to hide items from divination spells that are limited to the same plane
Then BBEG uses different divination spells, or the BBEG knows who took the items and scry/trace/track the players instead of the item. That isn't about railroading either, it is thinking about what the BBEG would resond to the parties use of the bag to hide the item they want.
The argument that putting the stuff into an extradimensional space is "less complex" than instantly changing the mass (and potentially size) of the item in this plane is weird to me. The extradimensional bag of holding just makes the item go somewhere else, where your bag changes the mass (and potentially volume) of the items inside which if you play with real-world physics can create even more and unexpected abuse than the play-tested and tried and true item from the DMG. But at the end of the day, it is your table, and if you feel a need for the item go for it.