3Rensho

So called all the big frame builders and no one will extend the steerer tube by a few mm's even though it's just to provide a bit more thread for the HS top cap.. May just have to run it as is or put in a spacer type thing..

the spacer makes no sense. The exposed area isn't going to cause any trouble. It's a matter of whether you can get the top one tight enough without stripping it from the fork.

In my view the best option is to put it on and tighten it less than you'd normally want to... and see if it comes loose. I would not ruin the headset in an effort to get it as tight as you'd like.

At any rate, the only two bad outcomes are a ruined headset in the shop or it rattling loose on the street. There is no "danger".

i would not machine the fork at the crown where the lower race sits, but it is an option as mentioned above ^^. I am not a fan of altering geometry if even by a few mm. Will the bike still ride? yes of course. But it can feel different. A distant concern is bringing the wheel too close to the downtube, but this is probably not an issue.