YES. Do it BEFORE the paintjob. Otherwise, you could chip away at the finished coating and cause it to chip away faster. Plus, if you want, you want to do some filing incase there's some rough areas (probably not).
As far as it wobbeling, it doesn't. With the screw in there, it doesn't move. However, with the screw out, that is when it can slide off. So as far as assembled durability, you won't have to worry about it.
Here are a couple of pics. One from www.m98center.com
from a friend Jason, and another is a pic of my gun about a year+ ago...
...These should give you an idea of where to cut, and how it will look, and how much better it is to take apart. And here's the center's link to the info. http://www.m98center.com/howto/41.html