I cut my stencils ALL OF THE TIME. There are two reasons for doing this:
1. Make the stencil fit the curve of your nail
Ok, my nails are super curved, and that is completely normal for some people. When I apply a vinyl stencil, I have to press it into the sides of my nails, and sometimes polish still manages to pool in the sides and leak under my stencil, making a mess. To prevent this from happening, after lightly placing the stencil on my nails where I want it to be, I have started to snip my stencil in 4 areas.
After cutting the stencil in those 4 areas, the middle part of the stencil is able to curve around my nail better when I press it down!
2. Only use a portion of the stencil
Sometimes my nail art isn't calling for a full nail of stacked arrows/chevrons. In this case, I am not afraid of cutting the stencil down to size. I simply cut the stencil while it is on the vinyl backing, and then only place the portions of the stencil I want onto my nail.