That's pretty much how a lot of coilovers do it without using adjustable strut tops (One set of coilovers I have are exactly like that, the TRD ones however need the adjustable strut tops).
Do it properly (ie, not by reaming it out with a drill bit...) and it should be fine. I would mark it out (2mm should do it) and carefully file it out with a circular file.
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