Personally I like it recessed so the hooks are flush with the end of the tube that way the rocket will 'sit' for display if the fins don't extend past the end of the tube..
I agree with Pantherjon, I like the "hidden" look and I like being able to stand a rocket on its tail without having to use a special stand. I don't like having an "exposed" motor mount unless it is a major design feature of the kit design. I guess hidden-versus-exposed is mostly a matter of personal choice.
One advantage I can think of for a protruding mount (and motor) when using Estes-type motors is that if the rocket is descending tail-first, the motor case takes any initial impact damage (and you are going to throw them away anyway). Unless you use motor hooks....
As far as stability impact, most rockets using a triple cluster are
probably going to be fairly long (as low-power rockets go) and moving the motors an inch this way or that is not likely to cause a giant impact on longitudinal balance and stability should not change much if the fins are moved along with the MMT. You still need to check, though, and be ready to add nose weight if the cluster is hanging back too far. It's all part of the fun of making decisions and choosing styles when you design your own rockets.