The author of Od Yosef Chai is the Ben Ish Chai, of Baghdad (1832-1909). And I do not have a copy of Od Yosef Chai in my library. But let us first analyze the pesukim in question, on a peshat level.
In Bereishit 29, in parshat Vayeitzei, we read:
rachel bito with hi, but that is not a substantive difference. The Ben Ish Chai says that from the fact that it does not say vehinei hi meviah et hatzon, "behold, she is bringing the sheep," but rather "behold she is coming with the sheep," we can derive that she sheep were neither in front of her nor behind her, but rather that she was in their midst, with the sheep surrounding her in all directions. Further, the Ben Ish Chai attributes this to a modest trait she had, that she wished to hide her beautiful footsteps, and the lower-half of her body, from people passing to and from and traveling in the desert.
On a peshat level, I do not find the Ben Ish Chai's diyuk compelling at all. We would say in English "Here she comes with the sheep," where it would not mean that she is within the sheep, but rather, that she is coming, and accompanying her are the sheep, or that she is bringing the sheep with her. Could we say "Here she brings the sheep?" We certainly could but it would sounds awkward, and slightly stilted.
Indeed, there was a reason I included the verses before and after the verse in question -- to provide some context. Yaakov was not asking about Lavan's sheep. He was asking about Lavan, and presumably also Lavan's family. Indeed, one major reason for coming to Charan was to get married to Lavan's daughter. Therefore, who is the ikkar and who is the tafel? Obviously, Rachel is the primary and the sheep are merely secondary, both within the shepherds' response and within the narrative in general. Therefore, the shepherds, and the Torah here and in verse 9, stresses that Rachel came. But with her came the sheep of her father. That is why it would be awkward to say "and behold, here Rachel brings the sheep."
So on a peshat level, the text has no problem, and indeed works better as written. Is the Ben Ish Chai treating this on a peshat level? I don't know. It reads like a midrash. Now is that midrash really compelled, and thus compelling? Many midrashim do seize upon awkwardness, and explain it away. But here, I am not really convinced that there is any textual awkwardness. Now there are (at least) two classes of midrashim. Some use the pasuk as a proof-text, and some use it as a pretext. In this instance, it seems to me that the pasuk is being used as a pretext, in order to develop a specific homiletic point about the value of tznius. This is fine, but we should keep in mind exactly how this pasuk is being used.
Rabbi Falk then writes:
"These were our Imahos. It is our obligation and privelege to live in their shadow and enrich our lives by learning from their examples. While it is not for us to wear dresses down to the ground (see 6:H:6 above) we can at least emulate the spirit of their ways."But it is really correct to respond to a late 19th-century or early 20th-century midrash with the words "These were our Imahos"? These were not our Imahos! This is the attitudes of a rabbi living in Iraq, living among Arabs who have extremes in tznius, projected onto one of our Imahos. And the Ben Ish Chai either does it consciously as homily because he thinks that these are positive Torah values and that this is a good way of promoting it; or unconsciously by assuming that 19th century Iraqi tznius accords with Biblical standards and values of tznius.
Either way, just because the Ben Ish Chai suggested this midrashic interpretation does not mean that it was historically true, and that these were our Imahos, and that therefore an obligation and privelege falls upon us to emulate them. We can consider Iraqi values and weigh whether we should adopt them, but the fact that some recent rabbi -- even as holy as the Ben Ish Chai -- retrojected his values on a Biblical character does not make these values binding in any sense.
But perhaps this is a natural chareidi attitude, in taking any and all midrashim literally.
There is what to say about "While it is not for us to wear dresses down to the ground (see 6:H:6 above)" but perhaps that is for another post, about Michal bat Shaul on page 407 in his book. For now, I will just point out that in taking this midrash so seriously, in his application he decides exactly what to draw from the midrash and what not to draw from the midrash. Thus, the midrash here says exactly what he wants it to say.