Cutting the lead outside of the joint area is certainly kosher (didn't know about the 0.5mm spec, good to know!), but this offset is clearly negative. One would assume that the lead should protrude to meet the (pervasive) visually-inspectable requirement.
Although it's impossible to argue against the resulting joint looking and feeling nice, there's beauty in function also.
I'm looking forward to the day when we can all buy $49 ($29 on DealExtreme, of course) pocket USB x-ray inspection cameras with AXI software so that we can have it both ways.
So, TI... get that SimpleLiink DXP product finshed up, mkay?
Per IPC-A-610 it is acceptable to trim leads, with the requirement that the minimum lead protrusion is 0.5mm (not flush). When a lead is trimmed after soldering, then it must either be inspected to make sure there are no fractures, or the joint must be reflowed. The main issue I see with the demonstrated method is that forming a solder ball over the end of the lead contravenes IPC, because the lead must be visible in the solder.
I was always taught to _never_ cut into solder joints like that because of the tendency to break or fracture the joint. I'm not convinced that putting a "pretty" solder cap on it is enough to restore a fractured joint -- but a reflux and full reflow might. After which you'd have to remove the flux, just as was done in the video.
It seems like if one is going to go to all of the trouble of strapping the component to the board, soldering, flush-cutting and finally prettying up the joint (or better), then you might just be better of just taping down (or reverse-tweezering) the components to the back (top, in this case) of the board, cutting the leads flush, then soldering the joint once. One solder hit, no stress on the joint, and no flux mess to clean up -- although you might have to remove some tape residue.
A few years ago I read an interview of someone (Geri, perhaps?) who said that she always clipped her leads before soldering, but thought that was crazy -- but if this was the result that she was after, I'd think that that'd be the way to go.
I'd be interested in hearing from a real IPC soldermeister on this. As it stands, I'm definitely not a fan of the demoed technique for boards other than as just photo subjects.