I do mine any time after the seedlings are big enough to handle.
Early transplants will have very few lateral roots, just the main radicle (tap root) growing down. I can still cut the root and the seedling will respond with laterals from just above the cut point. You have read about seedling cuttings where they take this to the next level and cut the entire root at the spot the stem changes color then treat it as a cutting. Both ways work.
if transplanting after secondary leaves have grown the roots usually have some small lateral roots so I cut just below the best bunch of laterals and transplant.
At 1-2 years old the seedlings will have developed substantial lateral roots so I trim just below the best bunch of roots that are close together, At that stage I usually also shorten the laterals as well.
So there is not just one option but a whole range of options that all work.