Now I am not certain but the cut-out was there to let water out. You will likely not see the BB cutout on a bike that sported pre-sealed sleeve or sealed bottom bracket days.

With a sleeve or sealed cartridge, if water did manage to get into the bottom bracket housing, it could pool and collect. In days gone by, before sealed this or that, water could get in through the spindle/cup opening. However, it could also get out through that same opening. With that in mind, it could not pool up.

If water is allowed to pool up, it can fill up chain stays and the like. Best to not have it there by allowing any that gets in, absolutely free access to leave. The sleeve or or seal will protect the bearings, so an opening in the bottom is not going to negatively impact the integrity of the bearing cavity.

Of course, I could certainly be wrong but that is what a local vintage bicycle guru told me.