These are etiquettes of Salah as to how one should prostrate properly and completely, and they should be given utmost importance because where the Quran directed Muslims to safeguard the prayer, it has said: وَ قُوْمُوا لِِلّهِِ قَانِتِيْنْ (and stand before the Almighty with great respect, (2:238)). And the Hadith mentioned by you is one of the applications of this very verse and if you read the Hadith, it mainly relates to maintaining concentration and focus and to not be involved in any activity that may distract us during our Salah, including full-body prostration involving all the relevant bodyparts. The main objective of this directive is to ensure that during the prayer, hair and clothes should not be tampered with. The Prophet (sws) is reported to have said: “I have been ordered to prostrate on seven bones i.e. on the forehead along with the tip of the nose and the Prophet (ﷺ) pointed towards his nose, both hands, both knees and the toes of both feet and not to gather the clothes or the hair.” (https://sunnah.com/bukhari:812)

Toes need to be on the floor, whether upright or horizontally, this will not render one’s Salah invalid. However, all these etiquettes are still to be seen separately from obligatory acts and azkar of Salah, which have been transmitted through Sunnah of the Prophet (sws). And if we see someone ignoring these etiquettes constanstly, we can point it to them in a humble and polite way.