Nobody I fly with regularly adjusts the handle for neutral, they adjust the length of one clip (line length)...the other three are usually stock items from Sullivan or Brodak. We all set the "overhang" of our TED Handles equally, at minimum (whatever clears our fat fingers) and glue them solid with CA. Look at Paul's CF handle...NO overhang adjustment, and one clip longer than the other. It works better that way!
I'm worried about your suggestion to epoxy on a tab for the safety thong...not a good plan. In theory, the safety thong and your handle are to be pull tested the same amount as your lines/airplane. No, we don't actually do it, but at the NATS they do. Maybe at some other big contests also. If you were to laminate a tab into a recess in your handle with epoxy...and maybe pin it with a dowel (for overkill), it'd be absolutely fine.
When in doubt, check the rulebook. I also see somebody about every year show up with a safety thong that isn't a "noose" as required by the rulebook. The thong is required to be a self-tightening loop, so it cannot come off your wrist. If it's new technology to you, read the rulebook. Lots of requirements there on how to finish your line ends, what clips are legal, safety thong, etc.
I'm not sure on how a deviation from the rulebook would affect AMA insurance, especially since AMA insurance is secondary to your homeowner's/renter's insurance. The best idea is to never find that out, IMO. That means that when you get sued, your Homeowner's insurance pays first, AMA second, and only when the limit of your Homeowner's has been reached. I've known several guys that were involved in court action due to an accident at a contest...none enjoyed the experience...at all. Just sayin', follow the book and be safe!
The original question was what would happen if there was zero overhang, and I don't think that has been answered yet. It would reduce the control loads felt at the handle...the "self-neutralizing" that a LOT of overhang would have. Would it be a good thing? Well, it would require a pretty wide handle spacing, 4" to 5" for most of us, because we have fingers in the way...unless you wanted to offset the line attachment to the side. That might be an interesting experiment...same spacing, but offset the attachment points to be a bit left of the fingernails (for right-handed flying). This would be a doable experiment that wouldn't require a new plane. For the 4"-5" spacing scenario, the controls in the airplane would then have to be VERY slow to give "normal" response that would suit most of us. And it would probably take a bit of getting ourselves readjusted. Might be interesting to try, tho.
Steve