Locked Knees?
I would be very cautious about locking your knees for two major reasons. Locking your knees will in effect restrict the free energy flow and blood circulation. To test this you can simply stand with lock knees and see how long you can endure before discomfort or you pass out. The other reason is you can not balance properly with one knee locked. If your supporting leg is bent slightly then you can compensate as you lift the rising leg to adjust your center and maintain your balance. I suspect that everyone here is doing this properly as it would take some effort to lock the knees and most seem to be gravitating to the proper relaxed state of mind/being.
Master Lin in the beginning of the video states, “to bend knees slightly and more if you want to loose weight”. As Shawn stated there may be some in between movements where the depth of the bend may change. I don’t think you would ever want to straighten the knees out to a locked state but you might naturally straighten the knees (without locking them) in certain transitions such as in Harmony of the Universe.
Manjusri,
There are many different forms of Qigong some will utilize variation of facing the sun/moon and gathering in and circulating energy from them. There are other forms that work with nature and plants with the same concepts of circulating energy. I think AlexK hit the nail on the head where the intuition should be your guide. The consideration of the sun being a distraction to your goal of reaching emptiness would be weighed out by your intuition on the fly.
I should add that in the pass I had experienced a real heart opening kind of la la state when doing my morning routines to a beautiful sun rise. In that particular case the sun was rising in the distance over a mountain. When the sun was visible it was not at direct eye level but a little above third eye so for me it was a comfortable transition and experience as the glow of the sun blended with my movement.