You are exactly right. Although Uncle Nick shows the line for the breakaway part as exactly at the level for the recess (at least on the Petrel), I found that it was actually easier to cut them an inch or so lower, which made actually stripping the recess easier. But the form should stay on the strongback, so the cut must be well above the strongback cutout.

Depending how thick your saw kerf is, you should replace the missing width - i.e. if you use a thin-kerf Japanese saw to make the cut, just hot-glue it back together, if you use anything thicker, add a strip of something the thickness of the kerf.