That is acceptable. I don't think you need to replace the belt though. 2 small holes where the old rivets are isn't something to worry about. Once the fabric frays a little that fraying will probably cover up the holes, yet it won't compromise the integrity of the belt.
Cap rivets go on the knee and split rivets on the side and crotch. Looking forward to seeing your upgrades. Post them up here once you've done them.
With that said, you're not approved.