I have always had an aversion to using the Estes folded-n-glued paper anchors, or anything else that blocks the inside of the body tube. This is probably just a left-over preference from my early days of flying lots of streamer and parachute duration rockets---you dont want ANYTHING to get in the way of deployment. I still try to build with no internal obstructions or features where the guts can get snagged and stopped. Then again, I am usually just a bit conservative in my approach to design and reliability.
First off, I like to use nylon cord for a tether, but I coat mine with glue for the part that will be inside the BT. Some of these TRF guys dont like using anything less than Kevlar, but I have not had problems with burn-through on my cords. Whatever you decide on, I recommend making the primary attachment at the back of the recovery compartment, and running the continuous tether out the front of the BT. (I put my elastic bungee chords between the tether and the nose cone.) I pull and hold the tether taught as I insert wadding and recovery items, and pack the excess tether last (just be sure it is bundled loosely and is free to pull out). The ejected materials slide over the cord and have nothing on which to get snagged before they pass out the front of the BT.
If I want an internal attachment for my tether line, I tie to the thrust ring, or outer edge of the centering ring, and coat that sucker with glue or epoxy at the attachment. If you are doing a minimum-diameter rocket and only have a thrust ring to work with, you may have to put a notch in it to make room for the tether. I pull the string tightly out the front of the BT so that the tether material runs straight along the inside wall of the BT, and glue it in place for several inches in front of the motor (much like what astrowolf has posted above).
Other options: Attach your tether externally at one of the fin roots or launch lugs, and secure it underneath a layer of fillet material. This leaves a string on the outside of your rocket that runs all the way up to the NC; some people dont like to do things that way. Or, use a small external attachment at the front of the BT, just behind the front edge, and run the tether around the corner and under the NC for minimal exposure.
If you must put your anchor inside the front, Stones has already posted a very good approach (and an Excellent illustration!). Looks to me like if you put a small puddle of epoxy over the attach point (and keep your fingers out of it) you will get a smooth bump that should not cause any snags.