Hi Grace, no you don't sound insane your counselor sounds insane!! . I hope I'm wrong though!! [wrong about your counselor that is ]
To me it's kind of along the lines of them asking you to try switching from one drug that's addictive, to another drug that has the potential to be just as addictive and maybe gradually give you/take from you just what the first drug did.
And herethennow has made the excellant point of: is she actually focusing on working with you as to why you feel the urges, and working on helping you reduce/block those urges?
And as for her seeming mad, try not to see that as a reflection on you. I'd say that she should be understanding as to how hard it might be for you, and fighting off urges isn't always as easy as...............so don't worry about upsetting her, if she isn't going to be there for you to listen to you, understand, help and support you in this............time for you to have words with her, and ask for more from her.
Alison

P.S. absolutely give the rubber band a try too!!