With new raw denim I slowly break the knee area in by not sittin on my knees or crossed legged right away. Like if I sit in those positions it'll be like halfway so I don't put too much stress in the knees. Or I'll pull up the pant legs a little to get more fabric in the knee area.
I still have little knee bags but it's not extreme. With raw denim you're pretty much always going to get some bulging in the knee area. How long have you been wearing them?
its my new standard for about 3-4 months i wanna say. the problem isn't the knee its the thigh muscle above the knee thats stretching it out also. but i'll do your method when the new cures come in.