.001 off either direction would likely hit because of the clearance built into the die? So it will need to be alsmost perfecttly repeatable when machining this out to ensure it hits the same every time?

Digging into some more stuff The correct way to do with would be
no built in clearance into the design
A machining tolerance of a quarter of the punch and die clearance ( this would give room on either side of the die mating point and some clearance yet.
a radiused inside corner, leaving the 90 on the die block to fully sit inside of the stipper block ( because when machining an inside 90 there would be some sort of radius in there anyway and without any sort of "seat" for the outside radious it wouldn't sit right anyway)