Would you allow it ?

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I would not. First of all, exactly how many strands can you cut off and still leave enough to satisify the ampacity requirements? Secondly, how many strands can be cut without impacting the structural integrity of the conductor? Finally, the manufacturer's listing instructions are unlikely to state that this practice would not adversely affect the characteristics tested during the listing process, so you would be violating 110.3(B).
 
Whenever I have seen this done the cutting of strands to allow it to fit into the lug was usually not one of the bigger concerns of the installation.

I usually first ask - how the hell did they ever manage to install 4/0 cable in the space that is there? Unless it is a 225 amp frame size device in an enclosure designed for a 225 amp frame size, which doesn't seem to happen much at all.

Some older panels did not even have room to land 4/0 on a 200 amp breaker very easily.
 
Absolutly not!!!! Pigtail, pin connector, or use a term strip to get to a smaller size wire--but only if the ampacity is not compromised--we use a TB and a short length of smaller wire(as long as it does not fall below the rating of the OCPD.)but only when wire size is due to Volt Drop
 
This is one of those things that may pose no real threat and may function as well as a compliant method. Hell, it may even look better (than split bolts).........but I really couldn't bring myself to do it under any normal circumstances.
 
It is probably pretty common and probably violates some kind of rule. There are ways to avoid doing it that other have mentioned. It's one of those kind of violations that probably does not harm so I would not get real worked up about it if I saw it in an existing installation with no other issues.
 
I've run into this problem where the conductors are sized up to 4/0 for voltage drop and a pin adapter only goes down to 2/0 which is still too big for a 100a breaker (the ones I had in the panel anyway). I used a splice kit outside the panel (it was direct buried) which had a wire range from 250 mcm to # 1/0 and reduced it to #1/0 to fit the breaker.
 
One bigger problem is when you cut wire off the 4/0 to get it into the lug of a 100 amp breaker your wire ends become very close together and in my idea very dangerous.
 
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