I too have used this trick for years and years. Probably picked up from a modelling magazine (Stan Catchpol anyone?) so the trick may pre-date all of us. I believe I have read it as a tip in one of the woodworking books for amateurs written in the 19th century.
Agree that normally anything other than clipping the wire is over-complicating things! With anything soft enough I just clip off the wire and I've never had a problem with it working in materials as diverse as pewter, polyurethane resin and epoxy putties. Only with something hard like sewing needles will I grind in facets, after cutting with a slitting disk. Sewing needles are very hard indeed and will do Bad Things to most wire cutters, probably best not to even try it unless yours have carbide inserts.
