It's convenient, but not necessary. For my tabletop dob, where the circle is between the ground boards and is stationary, I have the cut out below the eyepiece. For my 12" dob, the circle is on the top board and the pointer is adjustable, I have it set so the pointer is at the back of the scope where I'm less likely to kick it or otherwise knock it out of alignment. If I do need to move a few degrees, I can just look down and judge by looking at any part of the scale and if I'm moving more than 10 or so degrees, chances are I need to get up and adjust my chair position anyway. A buddy has his set to the front of the scope, which I would probably do next time as that is still out of the way, but visible from the ep.
I will recommend, if you are putting the circle between the ground boards, set up your pointer so that you have some room for adjustment/fine tuning. I use a strip of metal on the tabletop base and a magnet glued to a clock hand. The cut out gives me about 30 degrees of play. For my 12" I either use a clamp on pointer that can go anywhere or a small tent stake.
Here you can see the yellow strip of metal (a piece from an old tape measure)I made this from a binder clip, ball point spring and the tine from a plastic fork!This is an experiment with a laser pointer. Works well, except in the cold!
I am looking at the photo of your one sky. Is that a finderscope toward the back, behind the angle gauge. If so, what are you using with this scope? Did you put it back there for balance?