I cut them at 3.5". If needed, they can be lowered a bit by adjusting the arms.
Just for the record, per the directions, I used a new blade in a box-cutter knife and cut the flaps along a steel edge (T-square) on a board. Worked just fine... took about five passes to get through.
Also per the instructions, I used the steel tube as a hole punch. It was quite sharp at the cutting end, and did a great job. Since it was hollow, I just pushed the plugs out from the other end with a skinny screwdriver.
Everything seems to be shipshape. We'll be travelling Houston-Steamboat Springs soon, so we're ramping up to prep the coach.