Dies are made with a chamfer on the front edge
a) to help guide the Die onto the work
b) To allow for any radius between the shoulder and the diameter.
To an extent, this can be accomodated by cutting then thread nornally, and then reversing the Die so that back face cuts closer to the shoulder. Closer, because there will still be a little chamfer on the back of the Die. But usually, this does not cause a problem.
If an undercut is made against the shoulder, the problem doesn’t arise, since there is no longer anything for the matching component to butt against.
If you are worried about stress raisers and fatigue, this is a downside.
Howard