Unfortunately, this clearance relief weakens this casting area supporting the pilot bearing, although under the vehicle acceleration load the force is greatest in the direction of the support web, this area is particularly vulnerable to failure if the pinion bearing preload is not maintained, thereby allowing excessive movement of the pinion head and transfers excessive responsibility to the pinion pilot bearing, and I have witnessed failures.
Therefore, back when all we had were O.E.M. gear sets and cases available, to reduce this intrusion and otherwise sum of material removal from the casting required, I would chuck the ring gear in the lathe, spun at a good speed, and applied an air powered disc sander, with the 60-grit, 5-inch flex-disc, at a high speed, and remove the required sum of material from the gear profile. This execution, with reasonable technique was surprisingly quick an presented a good appearance. And for the naysayer, this reduction in the profile was practiced later by the aftermarket gear producers, this being a surface of little consequence in the gear set relationship anyway.
Scott.