What you can't really see all that well in the pic of the ex seat is why they sunk the ex seat ring.
It's so they could peen the edge that's left by sinking it, over the top of the seat to help keep it from falling out.

Call me old school, but I prefer to just use the correct amount of press to keep the seats from falling out.

So, the inserts they used were 1.750 OD, .0625" bigger than the "normal" insert, and they went a little deeper than preferred.
If you make the cut big enough, and deep enough..... There is water to be found.

Since the seats weren't pounded out, and there wasn't coolant coming out where it shouldn't be, I figured it would be wise to not tamper with what isn't a functional problem.

I'd blend as best I could, and they are what they are.

I did a bowl blend, rolled the short turns, and smoothed out the pinch area....., along with new guides, valve job, surfaced, cut for dual springs and posi seals.