In the absence of any further reason for the channel, I decided to press on and filled it with Metal Epoxy and filed it smooth. Then reassembled and tested. All pretty much as wanted, except the locating pin for the inner barrel allows a bit of lateral meow mental which can make the key difficult to extract. The solution is to pull on the key whilst putting pressure on the inner barrel to stop it moving outward. As I will seldom use this lock, that is satisfactory for me.
Peter