That is a first.
I would use a file to knock that "tag" down, and I would hold a vacuum cleaner nozzle over it whilst going so.
As regards the piston - use a stone as it will tend to lay the raised edge over rather than remove metal. it will also leave a nice polished finish so you will not lay awake at night thinking about stress risers.
And lastly, after Mrclubike's unfortinate experience, take the opportunity to pull both pistons and weigh them for balance (sorry if this last is taking cols to Newcastle).
I'm starting the process of filing the tags down today, I'll let you know how it turns out.
And the picture actually looks a bit worse than it is, its more of a dent that made a slight bulge on the outside of the piston skirt. I'll file it down with a fine diamond file. I dont think the removed metal will make any notable weight difference, as it seems to be very little metal that has to be removed. But I'll weigh them and see.
I was not thinking about stress risers at all... before now!!!

And I already have weighed the connecting rods for balance as best as I could, with the tools I have and could fabricobble, and they seem to be pretty well ballanced.
EDIT: In the proccess of troubleshooting I pulled my clutch and flywheel and took out the new flywheel bots and clutch assembly bolts.
I know its "stretch bolt 101" to not reuse them, but does this also apply to bolts that have been tightened once, and never been run or undergone any heat/cold cyckles?
I just installed my new clutch, new connecting rods and pistons
I interested on modification to use 860cc kits as well.
Would like to learn from everyone else here whom already got this improvement.
May I ask you why you need to replace with new connecting rod as well? It suppose not included with upgrade kits 860cc, right?
No it is not necessary to replace the connecting rods.

But one of my original connecting rods had a bend dowel pin, which resultet in the rod cap being misaligned on the rod, which in turn made the big end bearing halves misalign slightly.
And my clutch and pump were just worn out and needed replacing.