The diode there does work like you said.
Because if it is across the relay, it has to charge from ground to the source voltage level. But, if it is across the source, it has to charge from the source voltage level to the spike voltage level. In the first case, time needed is more, hence current flows for a longer duration after the switch is opened. If we want the the current to flow for the same time in the second case too, a much larger cap is needed. So, your method will work too, but it needs a much larger cap than in my method.

Yeah, there will be no arcing in a MOSFET, but it can heat up and get damaged.



Maybe it will work that way.


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