Not being a resident of Utah, I'm a bit hesitant to address this question. I could not find any direct reference to this "issue" - so I'm going to suggest that is probably NOT an issue under Utah law, but is apparently an "issue" with the "gentleman" who observed your NONCONCEALED HANDGUN in plain view. Just because a holstered handgun doesn't "jump out" and immediately serve notice to all persons present that you are armed - doesn't translate to concealment. This seems to be a case of the other end of the spectrum from MWAG "alarm"- undue "concern" resulting from failure to readily observe the presence of an armed citizen.
I myself prefer IWB holsters for comfort reasons. The fit is close to the body and does not create interference with my own activities, or risk a "bump-up" against something or someone else in close quarter situations. I suppose IWB carry CAN approach the threshhold of concealment , just as a subcompact, or BUG gun can be stealthy - "concealed" from obvious perception - though not technically concealed. Obviously in your contact with this "gentleman" your gun was NOT concealed or he would not have observed it.
Might some LEO take issue with IWB "discreet" carry without a CCW permit - perhaps. Just like Colorado - if I have a CHP- I'm covered for concealment, and it's not an issue if observed ( except in Denver).When I'm in Texas my IWB carry is very "discreet" - tuckable or under a fold of shirt - and not readily observable= therefore concealed.
I don't really see the "issue" here, other than some people have difficulty handling "gray areas" - too much brain-strain I guess. I've never been approached by anyone like your "gentleman". How you prefer to carry is YOUR business. I personally have a low tolerance for such narrow-minded, and unsolicited know-it-all prognostications.
Some people on this forum - who I highly respect - seem to feel that IWB carry is a wimpy way to OC. The way I see it that gun - and how you choose to carry it -is YOUR responsibility. Again I would think a CCW permit covers any alleged "CONCEALMENT". If your handgun is clearly identifiable as such - it isn't concealed. I hope my 2 cents provides some helpful perspective.