I'm a private pilot (in the U.S.) and I was doing hood instrument training with my instructor under VFR. I put on the hood and we did an instrument takeoff, and I flew up to 4,500 feet to do some VOR holding pattern practice, all while under the hood. We were in a Class C airspace. At 4,500 feet I peeked out from under the hood, and to my astonishment we were surrounded by thin wispy clouds. I think we even flew through one and couldn't see outside the airplane. It looked to me that we were obviously in violation of VFR cloud clearance requirements because the clouds were less than 100 feet from the plane and we flew through some of them. I said this to my instructor, and he insisted that we were still VFR and that I should get back under the hood and continue the holding procedure. I insisted again that we were clearly in violation of VFR cloud clearance requirements, and he again insisted that we were fine and we should keep flying. After three or four times he finally conceded, and we descended and did some practice instrument approaches while clear of clouds.
On the ground after the flight, my instructor said that the clouds were "scuds" or clouds just beginning to form, and that they were see-through. I'm a little shaken by this because I've worked with this instructor for a year and a half and I haven't seen any reason not to trust him, but I feel a little betrayed by this. My instructor is probably in his 60s and has been flying and instructing for many years. If I'm wrong and we were legal to fly through the scuds VFR then I'll admit that, but it seems to go against my education. Maybe pilots normally fly through scuds with no problem, and if that's common practice for pilots then I guess I'll do that. But if he let us fly into clouds illegally and then insisted that we keep flying, I'm a little shaken by that because I've worked with him for a long time and he seems to be a good instructor. I'd like some clarification on this.