I think I understand what you're trying to communicate. Let me see if I can clarify for you, and hopefully I'm right.
This is actually a more general issue that people have. This isn't limited to Chinese Kempo. Most forms of karate and kung-fu have the same issue.
Just to summarize, you're learning a style of kempo that involves a combination of karate and shaolin kung-fu techniques. And now you've started sparring. But you were surprised and maybe dismayed to discover that the sparring doesn't really look anything like what you learned so far in your kata (forms) and drills classes. What gives?!
I gave a good foundation in one of my other answers. Please read that link before continuing. That discusses the difference between sparring and traditional karate / kung-fu forms.
The forms and self-defense drills you do in class have a completely different purpose in mind than the sparring you do. Different purposes means they can look completely different.
In sparring, you're free to move around. Nobody is holding on to one another. So there's no grappling involved.
In katas (forms) and self-defense drills, the purpose is to deal with self-defense situations. These situations might involve attackers grabbing you or using a weapon against you. It's not the same situation as sparring. And so the techniques will look different.
You may also have drills that are actually for sparring. These sparring drills should directly apply to a sparring situation.
But in your case, you've seen that the drills you do in class look very different than the sparring you do. So that says that the drills you're doing are probably for self-defense, rather than for sparring.
What should sparring look like?
The answer to that question lies in understanding the rules of the sport. The rules determine everything. And your style itself (Shaolin Kempo) might not be for sport. That's fine. But there are always rules. The rules in your case might be there just to prevent injuries. And another thing to keep in mind is that the rules can change to become more permissive as you progress through to more advanced levels, for example allowing punches to the face or allowing foot sweeps only after you get to black belt level in some martial arts.
If the rules say you can't punch to the face, you're going to practice mostly kicks, and it might look like Taekwondo. Your hands will be low and might even be left dangling at your sides. Your stances will be long and side-facing. The side-facing stance means you take your target areas away from the direct line of fire.
If the rules say you can take down your opponent, you're going to use a bent-forward stance that's wider than a shoulder's width apart, like Brazilian Jiujitsu or MMA. You won't use a side-facing stance in this case, because that would just make it easier to take you down.
If the rules say you can only punch, your stance will be upright and should stand about a shoulder's width apart, like western boxing. Your hands will be kept on guard at your head level, too.
The rules determine everything. Stances and techniques evolve to fit the rules.
In your case, you're seeing a western boxing or kick-boxing style for free-sparring. Hands are kept high to guard the face. That's a good thing, in my opinion. That says their rules allow strikes to the head, the body, and maybe the legs. They're using their hands and feet. They may not care about grappling, at least at this stage in your training, because the stance isn't wider and isn't bent-forward slightly.
If you're ever curious about why something is done the way it is, ask your instructors. Chances are, they themselves asked the same question and have a pretty good answer.
If you think they're wrong, the best thing to do is try sparring a different way in your school and see what happens to you. After each time you lose, ask yourself why you lost. Be honest with yourself. Win or lose, bring it up with your instructors and tell them what you did and what happened. See what they think.
Of course you can also ask why your sparring doesn't allow you to perform the self-defense drills you learned, or anything other than punch/kick/block kinds of things. For example, one of your drills might be to throw someone to the ground and stomp on their head. The problem is your sparring class has rules that don't permit you to grab and throw someone.
You might be wondering if something isn't allowed, then how do you get good at it? When you're in a real-life situation where you have to use that technique, will you be able to?
The answer is: You're right. Pressure testing is absolutely a requirement for being able to successfully apply what you've learned in class to self-defense. And the best way to pressure test something is, generally, against a live, non-compliant partner, such as during sparring.
So why doesn't your school permit these techniques in sparring? And are there other ways of making sure the drills you learn are pressure tested enough to give you confidence that you can use them for real? You'll have to ask your instructor that question.
Hope that helps.