Its all adjustable, depending on size and species.. & when you get into the trunk flare, it gets really nasty to spit the step... pre-cutting the step may be required as Jay suggests.
I don't use it as much as I used to.. for years I used it on every tree I could, just to get a feel for all the variables. I originally started using the cut to make the work a little easier. Chips were $15-20/load, but if there was wood in the load, he charged $65, so we'd end up ripping the flush cut (from the stump) and chipping it, which sucked... Most of the time we grind the stump, and sometimes have to remove the grindings, so I want the flush cut ALAP.... on bigger stuff with wide flares, its a harder to cut a low notch, and on anything risky, I don't want my hinge fibers down in the trunk flare.. so the step was originally used to keep the hinge above the trunk flare, while leaving only half a round of the flush cut to handle/chip. Once it was clear just how much holding power the step has, the wheels started turning and I realized there are a lot of other potential advantages. That's when I started experimenting.. every chance I got for years... In all that time, (many hundreds of cuts) I've never seen the step effect the performance of the hinge..
Getting a low flush cut stump is outside a logger world, but is helpful in the suburbs..
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Here's the original vid from the siberian elm removal... is that thread archived on the old site??